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**JUNE 7, 2021**

Kuttner on TAP

About That G7 Corporate Income Tax Deal

****

Prodded by President Biden and Treasury Secretary Janet Yellen, the
finance ministers of the G7 nations reached an agreement over the
weekend that multinational corporations must pay 15 percent

of their profits in taxes, no matter where they are located, and no
matter what kind of creative bookkeeping they engage in.

This ought to be cause for celebration. For me, it is one more reminder
of just how pitiful was the leadership of Bill Clinton and Barack Obama.

This deal could have been had anytime in the past three decades. All it
took was American leadership.

Instead, Clinton working with his neoliberal crony Tony Blair of the
U.K. cooked up an elaborate choreography under the auspices of the OECD
to crack down on some offshore havens to require greater reporting. This
consumed endless bureaucratic meetings and draft policy papers and in
the end achieved exactly nothing. The game of shifting where profits
were booked continued,
and some of the largest multinationals managed to book profits nowhere
and to pay taxes to nobody.

Also missing from the Clinton and Obama efforts to address tax evasion
was any discussion of the race to the bottom in tax rates. In a
competitive frenzy to attract industry, competitive cuts in corporate
rates continued.

It is only against this pathetic history that an agreement to require a
true minimum rate of 15 percent and to end competitive rate-cutting
looks like an achievement. It's also noteworthy that the other major
G7 nations-Britain, France, Germany-are all governed by
conservatives. Yet once the U.S. led, they all went along.

With the G7 deal, the devil is still in the details. Ireland, with very
low tax rates, is not in the G7. How to bring Ireland along?

How exactly to define and enforce the accurate booking of corporate
profits? And there will still be conflict between the U.S. and the EU
over the nature and level of corporate taxes above the minimum,
especially when it comes to tech.

Biden and Yellen deserve credit for leading. Clinton and Obama get the
booby prize.

~ ROBERT KUTTNER

Follow Robert Kuttner on Twitter

Robert Kuttner's latest book is
The Stakes: 2020 and the Survival of American Democracy
.

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