Do you find the idea of global minimum corporate tax rate democratic or undemocratic?
The United States wants to impose a 21% minimum tax for corporations, no matter where in the world they are located. That idea is gaining momentum.
On June 5, the world’s seven richest nations (G7) reached a landmark deal to close cross-border tax loopholes used by some of the world’s largest multinationals. They agreed to the principle of a global minimum tax rate of at least 15%.
The stakes are high for Switzerland which is home to the most Fortune 500 companies in the world relative to its population and attracts companies with low corporate tax rates.
Should people and countries be able to determine their own tax regimes, or is a global standard needed to avoid inequalities? Let us know what you think in the comments below!
From the article Switzerland fears impact of minimum corporate tax rate
Hope the world stops following us and preserve their own culture and laws. Wherever they go it’s a mess.
After all, it is mainly the global tech and oil giants who know exactly how to save taxes at the expense of the general public. That must be combated at all costs. This project is not about SMEs and private individuals at all.
Es sind ja vor allem die globalen Tech- und Erdölriesen, die genau wissen, wie sie Steuern auf Kosten der Allgemeinheit sparen. Das muss auf jeden Fall bekämpft werden. Es geht ja überhaupt nicht um KMU's und Privatpersonen in diesem Vorhaben.
Taxes is part of the democracy, OECD is not democratic.
People of Switzerland should decide its own taxes.
The EU countries has weak democratic culture, and they are all mismanaged
How much more greed can our world stand??? How much more tax cheating should we, the unwashed, have to put up with? "Democracy" means 'the will of the people' but does it apply to rich only???
Democratic or not does not matter. The main point is that these super companies need to pay a fair share of taxes. I am no expert, but would not a Value Added Tax on Turnover be most simple? Ways need to be found to tax internet based trade properly too.
"Do you find the idea of global minimum corporate tax rate democratic or undemocratic?"
to the point: the way it has come about now = undemocratic.
Did the citizens of the world get to vote on this?
Why do we collect tax anyway?
There are so many loop holes that most big companies can fight their way out of paying anyway....
The whole idea of taxation and the way it is done and calculated needs to be thought about seriously and death with in such a way that Citizens are aware of what actually goes on in the 'accounting world'...
In democratic countries, high tax-paying (rate - income vs tax paid) citizens should influence what tax laws are made for them, in their own country. In larger countries, regions within the country should have more say in forming laws, which apply to their own regions. This allows for laws, which people who pay much (%) of their incomes in taxes, want within an administrative area.
The idea of global minimum tax, enforced politically, is not democratic at all. Citizens are not voting for such laws, and will not benefit from them at all.
High taxation is often the result of incompetent public sector management or lack of (will) competitiveness. It is an indication of wastage of tax revenue, and ineffective and selfish spending of tax revenue (e.g. huge welfare spending without benefit to society in future). It is an indication of poor accountability. It is also an indication of wealth/power being held in a very small number of hands; where money devalues faster, leaving the general population poorer, and then requiring even higher taxation - to support even higher spending (throwing more money down the drain).
Effective management of tax revenue comes by - ensuring that the population is healthy, has the right skills AND is willing to work and earn their own keep; by ensuring that public sector spending is open to scrutiny/accountability by the very people who fund it, and by ensuring that every citizen has access to the same opportunities for achieving personal growth and success (not equality in wealth, but equality in - Opportunity).
SUMMARY: What it means is that most middle/upper-middle class people generally have good/excellent and usable skills; they earn higher salaries but are not "rich" by any measure; they pay much of their incomes in taxes; but they are able to save the least money in their own lives; they are the most stressed; and they support their country with their taxes. They support the many people who are on welfare (little to zero tax payers). In fact, they even support the ultra rich, who have "extra" options/opportunities for paying less percentage of their incomes as tax.
Our methodology, logic, approach is flawed, and is not sustainable. Instead of wasting time on minimum corporate tax, we should focus on how we can offer all people the same opportunities in life (education, training, ease of doing business, job creation); so that more people can succeed and pay taxes; so that over time we can LOWER income taxes for the hard-working people and enable them to be less reliant on welfare., or to have stable, less stressful lives.
Taxes in countries is decided by the elected representatives, not foreign governments. In Switzerland its a decision by its citizen.
Yes and no.
Yes, because an American state can tax more a Swiss company because they think the Swiss company globally pays less than the decided global tax. They do it in the US, while Switzerland is still free to give companies lower taxes.
No, because Swiss citizens cannot decide taxes in a different country, like the US.
And that opinion comes as I am a tax and compliance lawyer :)
Dear XORECI6773, I hope you will agree that being a "tax and compliance lawyer" is no evidence of knowing what can/will/should work or not, nor does it make - what you say - "right" globally.
A lawyer fights on the basis of interpretation law in that country, and also finds loopholes in law to defend the side who pays him/her; and so can hardly be considered - "right" or even legal in some cases.
A country can decide how/what to tax, on revenue/income generated within its OWN country, but not what should happen in other countries - as that would NOT be democratic. You agree with that too - "No, because Swiss citizens cannot decide taxes in a different country, like the US."
Laws can be good or bad. If all laws were good, then many of us would not complaining about rules/laws in some other countries; often in countries we do not like!
On the subject of corporate or any other tax - I think it is better to pass laws which force the ultra wealthy to pay the same rates of taxes as others, on ALL sources of income; the same income tax rates should apply to dividend, capital gains tax, etc.
Yes this Tax is a good beginning and will start the ball rolling.
It will also help to pay for the new fighter jets for the Swiss Air Force which will be ready willing and able to defend Switzerland (out of office hours, weekends and public holidays excluded).
What a farce and mirage this country creates. However what is sadder is that the world does get taken in on this.
I've lived here for 20 years. The country is perfect, but I accept that no country is perfect. However, overall, I do not know of a better country to live and work in and raise a family.
I find that many other internationals who live here enjoy complaining about many things here, yet all of them are very happy to take enormous salaries. In my opinion they are hypocrites.
Retired and so no "enormous salary".
The hypocrisy is the State of Switzerland. Pretend to be fair, let the people decide but exclude the non-citizens voting in local elections (yes, national elections, no).
Therefore diversity precluded and the homogeneity maintained. However when work needs to to be done, heterogeneity wanted as the local population does not want to do that work.
Africa has a high tax rate, this does not help the population because the money is not spent wisely. every country should be allowed to fix it's own rate and the the US should stop with the bullying tactics.
companies will go where they get the best deal
This proposal talks about an average 15 percent, so countries will fight over who increases taxes faster, which will only result in more expensive products.
Did you know corporate tax rates vary significantly by region? According to the Tax Foundation, Africa has the highest average statutory corporate tax rate among all regions (28.50%). Europe has the lowest average statutory corporate tax rate among all regions (19.99%). The same source notes a downward trend. In 1980, corporate tax rates around the world averaged 40%. In 2020, the global average was 23.85.%.
hi Dominique,
The official tax rates are quire meaningless. The tax deductions and which money goes where is what defines the real paid taxes. For example, paying 20% taxes in a country where you can deduct most of your taxes over 5 years as you create new jobs and the same with your business expenses can easily lead to a 1-2% real tax.
The same applies with distributed services. The company I own might pay 12% taxes in Switzerland, but we pay 1% taxes on all our licensing and intellectual property via the Netherlands where we have that part of the business in a separate company. Also we get big deductions for 5 years as we are a new company. After that we'll move to Luxembourg where they offer something similar. The real tax rate is not the one in the law.
Hi Alexia. Thanks for explaining the issue from a company perspective. Very helpful.
Dear Ms / Mrs Soguel
I have the same experience. The stated number does not mean much.
My asian clients on paper would pay around 30% taxes, but when you add up the high amounts of deductions they end up paying below 5%.
It is a similar story with clients I help move to Switzerland. They bring here jobs from nordic countries at identical employer salaries for their top managers, the company gets to deduct a lot of things out of their taxes for the first 5 years like office costs, relocation costs, salary costs and in the end they end up with 2-3% tax rates, just to hold their money in Swiss banks for 5 years. After that we do the same thing moving them to Ireland, the Netherlands or Luxembourg. You move every 5 years but you pay little to no taxes and everyone welcomes you for bringing in jobs.
Switzerland is the most democratic country with 26 states setting tax rates and giving a proportion to the federal government while citizens through a referendum can refuse budget items of the federal government. USA would be a much fairer country if taxing powers were removed from the Federal government. Just image China if taxing was done in some 15 provinces and only a small amount given to the federal government. The same with Russia. Britain decided by vote to leave the EU and they will be successful so more will leave the EU. Switzerland citizens were sensible in voting not to join the EU. The same for Norway. Australia at federation in 1901 was one of the richest countries in the would. They had a similar tax system to Switzerland with the states doing all the taxing but they gave it way in an emergency of a world war and since the Federal government has done all the taxing and Australia has gone backwards since with the GDP/capita well below Switzerland.
Hi Peter. Thanks for sharing your thoughts on the subject and highlighting Switzerland's system of direct democracy and tax regime. Did you know that the Canton of Zug has the lowest corporate tax rate at 11.9%, making it a popular choice for big international companies? One question/concern is whether expensive Switzerland would remain an attractive business location if this change is made (depending on which minimum global corporate tax rate is chosen).
Not good an interference of democracy, countries decides taxes themselves in the democratic process. In some countries people want do limit government power, and prefer to pay for social service themselves. As an example EU have very high taxes and terrible social services.
This is colonialism in disguise. Low corporate tax rates are one of the tools available to developing countries to attract investors.
I completely agree with this initiative. Just look at mega companies like Apple who hide their gains overseas to avoid paying taxes at home. Same for all those corporations who buy a postbox in low tax jurisdictions.
Imagine if we as individuals taxpayers were allowed to use the same tactics.
We do. That's why I live in VS
We are, there are numerous countries with no taxations in the world.
Do not worry about Apple, its an American corporation, I can promise you that the US. gov, decides themselves what they want to do in terms of taxation. Not everyone wants to feed government with private enterprise profits, governments are normally terrible as
wealth creators.
How can it be democratic? It will be forced on 90% of the world by, what, 7 countries and few of their left leading friends? Most countries didn’t decide this let alone most people.
It helps Germany and France and US of course. Rich get richer and consumers pay. Corporate taxes are indirect taxes.
I don't think it is a matter of "democratic" or 'non democratic'...rather, it is a matter of FAIR or NOT FAIR.
A global minimum cooperate tax is illegal in many countries including the US. This is something to be feared and everybody should run from it. Run, run. unless you are a communist.
Everything you personally disagree with doesn’t mean it’s “communist”.
There is no such thing as equality. It doesn't exist in any corner of life. There is always someone who is more able at something than the next one and usually the ones sitting at the top know nothing about their jobs or anybody else's. They get the top jobs because they know somebody which means eventually there will be total incompatibility all around.
It's the same old story. Discrimination abounds and this would be no way of ending it. It would be great if we could rely on everybody giving their true situation. I just don't think that will ever be happening. The bigger the company the easier it is to hide facts.
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