The Wall Street Journal has an illuminating editorial about the international war against tax competition. High-tax nations (such as the United States) don’t like it when businesses shift operations to low-tax environments, and they mean to put a stop to it, using a grim transnational regime of programs designed to ensure everyone, everywhere is equally overtaxed:
After five years of failing to spur a robust economic recovery through spending and tax hikes, the world’s richest countries have hit upon a new idea that looks a lot like the old: International coordination to raise taxes on business.
Advertisement – story continues below
The Organization for Economic Cooperation and Development on Friday presented its action plan to combat what it calls “base erosion and profit shifting,” or BEPS. This is bureaucratese for not paying as much tax as government wishes you did. The plan bemoans the danger of “double non-taxation,” whatever that is, and even raises the specter of “global tax chaos” if this bogeyman called BEPS isn’t tamed.
Don’t be fooled, because this is an attempt to limit corporate global tax competition and take more cash out of the private economy. In the U.S., the Obama Administration has made a five-year fetish of attacking successful American companies that dare to keep overseas profits overseas rather than pay America’s 35% corporate rate (plus state taxes). In the U.K., Starbucks, Google, and Amazon have been treated as scofflaws for not paying what politicians call their “fair share.”
Read More at Human Events . By John Hayward.
Photo Credit: 401K 2012 (Creative Commons)