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IPFS News Link • General Opinion

Forget Companies--the Global Taxman Wants the Middle Class

• by Joseph C. Sternberg

To hear some politicians and commentators tell it, this will be a banner weekend for global tax policy. And you know what that means, dear reader: Hang onto your purses and wallets.

The danger to personal tax bills may not be immediately apparent because the current discussion concerns corporate taxation. Finance ministers from the Group of Seven developed economies will gather in London this weekend, and indications are that they hope to hammer out a new arrangement for taxing international companies. Negotiators have been chipping away at this for years under the auspices of the Organization for Economic Cooperation and Development. Suddenly there's a sense this project is only a hair's breadth from the finish line.

What's changed is the White House. President Biden and Treasury Secretary Janet Yellen have broken with Washington's longstanding and bipartisan hostility to international tax overhauls to embrace the OECD's concept of a global minimum tax. This is half the OECD's agenda ("pillar two" in the argot) and Mr. Biden and Ms. Yellen hope a sufficiently high global minimum tax would shield the American economy from the anticompetitive consequences of their plan to raise the rate of corporate tax on U.S. companies from 21% to 28%.