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**JUNE 1, 2021**

Meyerson on TAP

Catching Up With Capital

According to a story

in today's

**Washington Post**, the finance ministers of the G7 will endorse
President Biden's call for a global minimum tax on corporations when
they meet this Friday in London. While Biden initially set the bar at a
21 percent minimum level, he's since lowered it to 15 percent. That
may be too low to stop U.S. corporations from gaming the system by
funneling their profits abroad, particularly if their domestic tax rate
is raised to the 28 percent that Biden has suggested, or even the 25
percent put forth by Joe Manchin. But just setting a global minimum
would nonetheless be a huge achievement.

According to a 2018 study by UC Berkeley economist
Gabriel Zucman
and two University of Copenhagen colleagues, fully 40 percent of the
profits that multinationals earn outside their home country are
"artificially shifted to [such] tax havens" as Ireland, Luxembourg,
the Cayman Islands, and Bermuda. The theory behind Biden and Treasury
Secretary Janet Yellen's proposal is that the rest of the world's
nations lose needed revenue through such tax-dodging, and by agreeing to
a global minimum rate, their collective clout will bring the tax havens
into line, too. To the best of my knowledge, no one has yet suggested
what kinds of persuasion would suffice, but I'm all for economic
sanctions, travel bans, and anything else short of war.

Agreement on global tax levels is important conceptually as well.
Historically, governments have always been several steps behind
corporations as those corporations have expanded their scope. In the
U.S., the railroads were the first corporations to expand beyond a
single state's borders in the years following the Civil War, amassing
levels of wealth and power that dwarfed those of state governments,
which the railroads frequently purchased and controlled. It was not
until the 1890s that movements arose that tried to corral corporate
power on a level commensurate with the corporations-that is, on the
national level. It was not until the 1930s, when the New Deal was
created, that national government finally rose to that challenge,
however partially and imperfectly.

It's now nearly half a century since multinational and then global
corporations arose, eroding the capacity of national governments to set
or defend the social democratic accords on wages, taxes, and regulations
that they'd enacted between the 1930s and the 1970s. In a tepid and
half-hearted way, the European Union has created numerous cross-border
regulations over the past few decades, but nothing remotely so ambitious
as a minimum tax, much less a global one.

Capital is simply more mobile than labor or politics or legal regimes,
the closing line of

**The Communist Manifesto**notwithstanding. If American history is any
guide, it takes many decades for government, with its standards and
regulations, to catch up with capital's expanding scope. Biden's
proposal signals that it may finally be time for the world's
governments to play catch-up-and not a moment too soon.

I'll be on a break for the next couple of weeks, returning to my On
TAPPING in mid-June.

~ HAROLD MEYERSON

Follow Harold Meyerson on Twitter

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Biden's Jekyll-and-Hyde Judicial Nominations

Democratic senators like Cory Booker and Bob Menendez continue to
undermine Biden's call for noncorporate judicial appointees. BY
ALEXANDER SAMMON

The Housing Madness Will Hit Renters the Hardest

Purchase prices may be skyrocketing, but the real problem is an imminent
eviction crisis and a stubborn inability to deliver rental relief.
BY DAVID DAYEN

Biden Administration ICE Contracts Encourage Forced Labor

A contract signed in April with the detention facility in Port Isabel,
Texas, continues $1-a-day wages for those detained. BY JACQUELINE
STEVENS

Minority Rule

Given the Republican ferocity in trying to destroy basic rights, the
road back to democracy is not civic but political. BY ROBERT KUTTNER

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