Shut down the tax havens.
By Gus Wezerek Graphics Editor, Opinion |
If you had asked me how I felt about tax havens last July, I would have smiled politely and pushed the conversation in another direction. Perhaps to my partner's new rollerblading obsession, or maybe to that excellent Phoebe Bridgers album. |
That changed after I read a book called "The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay." The authors, two economists at the University of California, Berkeley, draw clear lines between declining corporate tax rates, the rise of tax havens and skyrocketing inequality. |
Suddenly, the only thing I wanted to talk about was Ireland and Bermuda's rock-bottom tax rates. "Did you know," I wanted to ask friends, "that in 2018, Facebook booked $15 billion in profit in Ireland — the equivalent of about $10 million for each of its employees there?" |
Sadly, the pandemic ruled out any social gatherings, and my friends were denied my musings on tax policy. But I am patient. |
Last month, when President Biden and the other leaders of the Group of 7 agreed to a proposal to shut down tax havens by enacting a minimum tax on their companies, I knew I had a chance to spread the gospel of tax reform. |
I emailed the authors of "The Triumph of Injustice" to ask how they felt about the announcement. One of them, Gabriel Zucman, told me that he thought the 15 percent minimum tax proposal didn't go far enough. If the Biden administration really wanted to help working-class families, he said, it needed to push for a rate closer to 25 percent. |
In an essay published this week that grew out of that conversation, Gabriel and I chart how average Americans have been left behind for decades as a handful of rogue nations have helped U.S. business owners consolidate power and wealth. |
If Congress passes a minimum corporate tax, it would be one of the most significant changes in global tax policy in a century. But the devil is in the details. |
A 15 percent tax would leave companies facing a lower rate than the average American pays in income tax. A 25 percent tax, on the other hand, could give working-class Americans a real shot at prosperity. Just take it from me … and the economist who wrote a book about it. |
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