Wave Goodbye To Biden’s Minimum Global Effective Tax Rate Of 15% Deal

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Authored by Mike Shedlock via MishTalk.com,

Trump is doing many good things by executive order. Here’s another one.

Flashback June 5, 2021

Please recall this Statement from Secretary of the Treasury Janet Yellen On G7 Finance Ministers’ Commitment to Global Minimum Tax

The G7 Finance Ministers have made a significant, unprecedented commitment today that provides tremendous momentum towards achieving a robust global minimum tax at a rate of at least 15%. That global minimum tax would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the U.S. and around the world. The global minimum tax would also help the global economy thrive, by leveling the playing field for businesses and encouraging countries to compete on positive bases, such as educating and training our work forces and investing in research and development and infrastructure.

Signed and Sealed but Dead on Delivery

Yellen signed that deal without approval from Congress.

The deal was so bad not even Democrats could stomach it.

Now, it’s permanently dead. Trump ended any chance of enforcement.

The End of the Global Tax Affair

Today, I am pleased to report The End of the Global Tax Affair

Mr. Trump is taking aim at a tax scheme cooked up at the Organization for Economic Cooperation and Development (OECD). The first part of the deal, known as pillar one, imposes a surtax on the world’s largest companies and is aimed primarily at American tech and pharma firms. Pillar two creates a minimum global effective tax rate of 15%. Governments such as France or Germany could impose “top-up” taxes on U.S. companies whose tax bills at home are too low.

And here we are. Mr. Trump’s executive order instructs incoming Treasury Secretary Scott Bessent to warn the OECD that Ms. Yellen’s promises don’t stand unless Congress passes legislation. The order asks Treasury and the U.S. Trade Representative to propose ways to retaliate against governments that impose taxes that violate existing tax treaties. Parts of pillar one, if implemented, would do precisely that.

The global tax deal also gets a veiled mention in a separate executive order on trade. That order instructs officials to examine whether other governments impose “discriminatory or extraterritorial” taxes on U.S. citizens or companies—followed by a menacing mention of section 891 of the tax code. That provision allows the U.S. to double the tax bills of foreign companies or individuals whose governments single out American companies for heavier taxation. It’s the nuclear option of global tax policy.

Poof. The global minimum tax bill that Janet Yellen unconstitutionally signed just vanished.