THOMPSON: It’s time for tax simplification in Canada and around the world | iINFOnews
July 12, 2021 – 12:00
It was – if I remember correctly – breathtaking greenâ¦ almost like hand painted by a thousand artists. I pulled my rental car off the road between Shannon Airport and Limerickâ¦ stunned by the hills and valleys ahead of me.
“No wonder the Irish call their home, ‘The Emerald Isle’,” I said aloudâ¦ despite being alone.
Today, it’s not so much the lush green countryside of Ireland that brings to mind green. Rather, it is the â¬ 200 bills and the hundred US dollar billsâ¦ tonsâ¦ all demanded by multinational companies that have established their âheadquartersâ in Ireland simply to avoid taxes.
Dublin’s skyline is no longer as picturesque and romantic as it once was. Its familiar face of old low-rise buildings and historic sites gave way almost ten years ago to offices with familiar names and logosâ¦ Google, Twitter, FaceBook, Airbnb, Microsoft, PayPal, LinkedIn, Yahoo and so on. right now.
Canada and 129 other countries agreed last week to review the way large multinational corporations are taxed. This is the first step towards changing global taxation for over a century.
The agreement proposes an overall minimum corporate tax rate of 15%â¦ aimed at combating tax havens and corporate abuses aimed at avoiding fair taxation.
The Organization for Economic Co-operation and Development – based in Paris, France – hosted the talks and said the new global minimum corporate income tax of 15% would generate around $ 150 billion in new tax revenue each year. . Money that today – for the most part – is split between well-paid senior executives and relatively wealthy shareholders.
The 130 nations account for about 90 percent of the world’s gross domestic productâ¦ the market value of all final goods and services produced in any given year. Thus, getting 130 countries – some world powers, others not – to agree on anything beyond the form of the conference table is a decisive step.
Ultimately, a deal would shift the rights to tax over $ 100 billion in profits to countries where profits are made for the aforementioned multinational companies. This is a step in the right directionâ¦ but a short one at bestâ¦ and certainly predictable given that wealthy shareholders and executives dictate tax policies in nearly all 130 countries.
You see, the fair global corporate minimum income taxâ¦ based on what individuals – typical employees – payâ¦ should be around 25 percent, not 15 percent. But the good news is that any global minimum tax means multinational corporations can no longer pit one country against another in an attempt to lower tax rates.
Perhaps US President Joe Biden said it best: “They will no longer be able to avoid paying their fair share by hiding the profits generated in the United States, or any other country, in lower tax jurisdictions.” .
It is still not their fair share.
The 130 countries hope to reach a deal by Octoberâ¦ with the new rates in effect by 2023. But before everyone starts celebrating the half-step improvementâ¦ nine countries haven’t signed the original dealâ¦ and go ahead and guessâ¦ yes they are low tax EU members Ireland, Estonia and Hungary, as well as Peru, Barbados, St. Vincent and -the Grenadines, Sri Lanka, Nigeria and Kenya.
It’s time for the United States, Canada and other more powerful nations to use their influence and force these renegades to play by the rules that everyone obeys. I wondered how 130 countries could agree on a global minimum corporate income tax of 15% so easily.
After doing some research, it’s pretty obvious: The new milestone tax rate is lower than the current average global tax rate of 23.85%! That’s why 25 percent – not 15 percent – makes sense. That way, we would actually achieve everyone’s goal – reading companies – by paying their fair share.
How do these bogus chords happen? Well, the same relatively wealthy and powerful people in charge are making the rules. And like politicians in the United States, Canada and 128 other countriesâ¦ they give the impression that they really did something for the people – the workers – rather than for themselves.
See, if you haven’t already done the math … that $ 150 billion in new tax revenue with a 15% global minimum income tax would skyrocket to $ 250 billion.
Again, this is a question of fairness. Do you know why we cannot lift people everywhere out of poverty? It’s not the false news that the poor are lazy or demotivatedâ¦ no, it’s that we are spending less on the poor than 50 years agoâ¦ almost everywhereâ¦ because companies are reducing their fair share.
Canada has a 26.47 percent corporate tax rateâ¦ and rather than lowering it to 15 percentâ¦ the rest of the world should move closer to Canada’s rate. That way everyone winsâ¦ if you have the audacity to say that the poor win.
Another potential drawback is the exemption from the proposed 15 percent tax rate for the shipping industry. It seems tax codes and shipping policies are more complex – read manipulated – than virtually any tax anywhere on Earth.
But remember in 2012, when the UK government sought to simplify its complicated VAT rules and proposed the removal of a hard-to-explain exemption for freshly prepared take-out? It didn’t go well. It could be the same for worldwide shipping.
The answer is to simplify taxationâ¦ it is always the answer to all types of taxes. The more special interest lobbies and earns two cents on new tax policies … the more special interests end up making money and not pennies … or even meaning.
Like global warmingâ¦ or any real problem that seems too big to tackleâ¦ we have a choice. Fight a fair global corporate income tax now for a fair resultâ¦ or keep making it worse.
– Don Thompson, an American awaiting Canadian citizenship, lives in Vernon and Florida. In a career spanning more than 40 years, Don has worked as a journalist, speechwriter and CEO of an advertising and public relations firm. Passionate and compassionate man, he enjoys writing as much as good dinners accompanied by great wines.
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