Some ideas are so absurd, the adage goes, that only an intellectual could believe them. The global minimum corporate tax outlined by U.S. Treasury Secretary Janet Yellen is one of them. The proposal will not only embarrass U.S. President Joe Biden because of its likely failure, but could also empower countries seeking to undermine the liberal international order, especially China and Russia.
The underlying concept’s resonance with liberal politicians like U.S. President Joe Biden is as unsurprising as its appeal to a liberal intellectual like Yellen. The world’s governments would start approaching multinational corporations like they approach the labor market—only instead of a global minimum wage, they would collectively demand a global minimum tax. The intended effect: more money for governments and less money for corporations. To its proponents, an equal minimum tax has an appealing moral clarity. And it’s an elegant concept in economic theory.
