China, India agree to global minimum corporate tax

World leaders agree to tackle chronic tax avoidance by multinational firms.

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Editorials

July 8, 2021 - 9:31 AM

U.S. Treasury Secretary Janet Yellen tackles tax cheats. Photo by Yin Bogu/Xinhua/Zuma Press/TNS

Donald Trump’s global economic strategy was to rail against other nations for ripping us off while doing little to level the playing field. Indeed, the trade wars he started harmed American consumers and cost taxpayers billions in subsidies paid to U.S. farmers.

Joe Biden looks upon American leadership differently. His and Treasury Secretary Janet Yellen’s so-far successful campaign to implement a global minimum 15% corporate tax is an early sign that there’s a far better way than Trumpian fits of pique.

We’ve been living with the problem for years: American corporations, which paid roughly one-third of federal revenues in the middle of last century, now pay just one-tenth of federal revenues. They dodge about $90 billion in taxes annually and hold $2 trillion in profits offshore. Meantime, corporations and wealthy individuals are estimated to cheat governments of $427 billion in taxes a year.

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