The News Radar

Timely links to external news and articles, usually valuation related, with occasional commentary.

Originally posted Monday, 18 July 2022
Sen. Joe Manchin Balks at Global Minimum Tax

The Biden administration’s international tax agenda suffered a setback when Sen. Joe Manchin rejected a 15% minimum tax on multinational companies this past week, dimming prospects of turning last year’s global tax agreement into reality.

Now the administration must try to urge other countries to go first and hope that momentum, pressure and the potential for lost revenue can compel a future Congress to act.

Last October’s deal had two key pieces. One, the minimum tax, would put a 15% floor under corporate tax rates. It was designed to help countries raise revenue and prevent companies from shifting profits into low-tax jurisdictions. It was designed to be optional but with mechanisms that encourage nations to join once a critical mass of countries have implemented the tax. That is the part that Mr. Manchin blocked this past week.

Global tax inconsistencies are such a drain on productivity, and hurt medium sized companies the most (though, multinational mega-corps would surely love to pare down their multi-thousand-headcount tax departments, I'm sure). This deal is a real opportunity to make progress on this front.