Why is the federal government always the winner in every tax dispute?

During the Biden administration, Treasury Secretary Janet Yellen met with the OECD countries to agree on a global minimum for corporate taxes. It is noteworthy how Yellen is not even hidden behind the purpose of the tax minimum: it was to ensure that OECD countries would not compete for the largest and better companies through lower tax rates.

From this, it is easy to see that US companies were hit harder than the tax collusion that Yellen participated. This is due to the fact that US companies, due to the existence of some of the most valuable in the world, also have the most important global presence.

Translated, Yellen’s tax collusion facilitated foreign governments to tax the largest companies in the world, these companies are often American, which means that Yellen’s tax collusion has proven unexpected for foreign governments. As Republican Economist Lawrence Lindsey recently put on to Journal Wall Street“Biden and Yellen handed over to foreign countries permission to transcend US businesses.”

This brings us to a tax difference, which can be found in the tax bill that is making its way through Congress right now. Responding to Yellen’s actions and the subsequent excessive taxation of US subsidiaries of US companies, Congress has decided to hit back with section 899. Some call this a “revenge tax”, according to which the subsidiaries of foreign companies can be taxed in the US. The case with revenge tax is that the blow will force foreign governments to shrink their tax payments of the profits of US companies operating abroad. What is the problem.

Really, why will Republicans write a tax bill to encourage all kinds of taxation of companies in the state, domestic or foreign? Regardless of what, corporate taxes mark the double taxation of individual profits when they remember that people have companies. This applies to domestic companies, but also to foreign addresses. US investors hold shares in companies around the world, which means that a tax on foreign profits will often be a tax on US employees.

Exactly the same, a larger tax on foreign subsidiaries in the US would be a tax on foreign investment. Will increase operating costs in the US. There is never enough capital and US economic activity requires capital in plenty of amounts. How weird for Republicans to put tax on it.

How strange, especially taking into account how much the President of the Trump political capital has put in the 2017 tax cuts, the cuts charged as an attempt to bring more corporate activity (once again, domestic and foreign) back to the US Section 899 would be a penalty.

Not so, says Lindsey. He defends revenge tax as a way to “relax the vague and stupid embrace of the previous administration” of the world’s minimum. There is no disagreement with Lindsey about Yellen and the misleading imposition of enhanced taxation on US companies, but there is his own embrace for the mistake of looking wrong.

The simple, critical truth is that capital is valuable. And precisely because it is precious, the vast majority of it find its way to the United States. Let’s not tax a brilliant US characteristic.

Instead, let us recognize what is true: Lindsey himself “neither the OECD nor the G-20 have any writing principle”, after which Yellen’s tax “never submitted to Congress for approval”. So you have it. Put what Congress never approved for voting instead of using an amazing tax as revenge against an excellent tax. Really, why should the federal government always be the winner of tax disputes?