Has Trump Killed the OECD's Global Minimum Tax?

Good news, if he did! The OECD Global Minimum corporate tax is a globalist monstrosity! It should be left to the individual countries. It would make voting by feet impossible. The same has been tried with personal income taxes!

What was the famous quote by Benjamin Franklin? "Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”

Caveat: I did not watch the whole video.

Trump's Declaration of Independence From International Taxation by the OECD to prevent a global corporate minimum tax

Good, but dated news! This very important Executive Order on the first day in office by President Trump was surely underreported and it escaped my attention.

Resist the global socialist central planners of the world!

"Among the sweeping executive actions of his first day in office, President Trump delivered a rightful blow to international attempts, stoked by the [46th President] Administration, to encroach on United States tax sovereignty. With a stroke of his pen, Trump made clear that any [46th President] Administration commitments to the scheme of the Organization for Economic Cooperation and Development (OECD) to institute a global tax regime are without legal effect.

Those commitments had been significant. At the heart of this matter is a Global Tax Code developed by the OECD that it claims received sign-off from 147 countries. Apparently, the [46th President] Administration forgot that only Congress may enact America’s laws as specified under our Constitution. ...

America’s Founding Fathers rebelled against taxation without representation. From this vantage point, acceding to the global tax initiative—cloaked in the guise of a “fair” minimum tax—was itself an egregious overreach. Today’s fight against the OECD is now a rejection of imperialism by foreign powers and unaccountable international bureaucrats, whom the [46th President] Administration aided and abetted. ...

The Global Tax Code’s “Pillar One,” which is still being negotiated, would redistribute taxing rights over profits to be based on the location of sales. OECD, threatens that this is the only way the United States can avoid aggressive “digital service taxes” (DSTs) imposed by other OECD countries, which themselves violate our tax and trade agreements. DSTs disproportionately target American companies while benefiting China. ..."

A Declaration of Independence From International Taxation "By rejecting even a ceasefire on the OECD’s Global Tax Code, the U.S. reaffirms its commitment to self-governance and the Constitution."

Thailand begins OECD accession after BRICS debut within a week

Good news! Thailand is in a hurry to join clubs! 😊

"Thailand on Wednesday formally began the yearslong process to join the Organisation for Economic Co-operation and Development, part of its bid to transform into a high-income country by 2037 by adopting standards and practices championed by the club of advanced economies.

Thailand's OECD accession process starts a week after it became a partner of the BRICS bloc, which began as Brazil, Russia, India, China and South Africa. ..."

Thailand begins OECD accession after BRICS debut - Nikkei Asia "Indonesia also enters yearslong process to join club of high-income economies"

Israel to apply the OECD 15% minimum corporate tax from 2026

Bad news! Surprisingly very unwise of Israel to follow this minimum corporate tax regime pursued by the OECD!

Is Israel doing this to finance the Israel-Hamas War?

"Israel’s Ministry of Finance has announced that it will apply the Qualified Domestic Minimum Top-up Tax (QDMTT) from 2026, as part of the OECD Pillar 2 international tax reform.

This is a plan to change the existing corporate taxation system, to allow countries to collect more taxes from international companies that sell products or services to their citizens. The purpose of the program is to update taxation laws and allow them to deal with the digital economy and with companies that report their profits in countries that collect less taxes from them, regardless of the countries in which their profits are generated. ...
Israel’s Minister of Finance Bezalel Smotrich said, "Israel's joining the implementation of the international standard ...
Over the past decade, the OECD has been promoting the BEPS (Base Erosion and Profit Shifting) project to prevent the erosion of the tax base and the diversion of profits by multinational corporations between countries, among other things by shifting activity to countries where the effective tax rate on corporations is low. 140 countries are participating in the project, including the State of Israel. ..." 

Israel to apply 15% minimum corporate tax from 2026 - Globes The change will affect multinational tech companies operating in Israel including Facebook, Apple, Amazon and Google.

Indonesia to normalize ties with Israel amid OECD membership bid

Good news! Quid pro quo?

"Indonesia is expected to normalize ties with Israel as part of its bid to become the 39th member of the OECD, a diplomatic source revealed on Thursday.

The Southeast Asian nation is home to the largest Muslim population of any country. Its normalization with Israel would send a powerful signal of acceptance for the Jewish state at a time when it is facing increased isolation due to the Gaza war. ..."

Are Israel and Indonesia normalizing relations? - The Jerusalem Post Normalization between the two countries had been planned but untimely sidelined after the breakout of the ongoing war.

Nuclear Energy Agency (NEA) - COP28 recognises the critical role of nuclear energy for reducing the effects of climate change

This is perhaps the most important result of the FLOP28!

Did it take the COP only 28 years to come to this obvious conclusion? (Caution: irony)

"The 28th United Nations Climate Change Conference (COP28) was a historic event for nuclear energy when it was formally specified as one of the solutions to climate change in the First Global Stocktake of progress toward meeting the goals of the Paris Agreement.  ...
The OECD Nuclear Energy Agency welcomes the outcome of the COP 28 global stocktake, which for the first time acknowledges the crucial role that nuclear energy could play in helping countries to lower their carbon emissions ..."

Nuclear Energy Agency (NEA) - COP28 recognises the critical role of nuclear energy for reducing the effects of climate change

OECD-Mindestunternehmenssteuer: Selten war eine Schweizer Volksabstimmung von so globaler Wichtigkeit!

Werden die Schweizer Bürger die Welt vor einem großen und gefährlichen Unsinn retten? Beten und Hoffen!

Ich vertraue auf die Besonnenheit der Schweizer Bürger diese Maßnahme abzulehnen! Erinnert euch des Rütlischwur!

Das immer Steuereinnahmen gierige Big Government hasst den Steuerwettbewerb! Wenn die OECD damit durchkommt, war das erst der Anfang! Wehret den Anfängen der Allmacht des Staates!

Wieder so ein Beispiel ätzender Globalisierung durch Zwangsvereinheitlichung!

OECD-Mindeststeuer: Das ändert sich bei einem Ja Rund 140 Länder, einschliesslich der Schweiz, haben sich auf die Einführung einer Mindeststeuer für internationale Grosskonzerne von 15 Prozent des Gewinns geeinigt. Bundesrat und Parlament haben die Schweizer Umsetzung beschlossen. Das Volk stimmt am 18. Juni darüber ab.

OECD laments high level of corruption in Israel in latest country report

Common it is the Levant! Bribes smooth transactions so they say! (Caution: Satire). Does the OECD not say this every two years?

"... The report, which examines the Israeli economy, is published every two years. ...

The report notes that the average level of corruption in Israel is high compared with other OECD member states ..."

OECD warns on judicial overhaul - Globes Judicial independence and checks and balances are vital for a strong system, the OECD stresses.

Outcome of major OECD corporate Tax Reform is Uncertain

Recommendable! This OECD tax reform seems to be a globalist monstrosity! Government greed knows no bounds!

Tax competition among countries is very important to keep government greed and Big Government in check!

This Big Government agenda also includes redistribution of corporate profits among countries!

What is the euphemism used here: tax harmonization!

The targeting of large corporations for their allegedly tax evading maneuvers across borders is one of those favorite political games!

The most prominent component is the uniform 15% corporate tax rate! It is supposed to eliminate or significantly reduce tax competition among countries. However, this is almost doomed to failure, e.g. there are too many countries and the incentives for individual countries to circumvent are too high.

Any economist knows that the tax rate is the least important aspect of a tax system. Much more important is how is income defined and how are tax laws enforced etc.

"The OECD tax reform could be seen as the final act of efforts to harmonize international corporate taxation. Just a few years ago, there was a consensus that key challenges such as the taxation of digital companies with no presence in a country should be addressed within the existing system. Now the OECD, with the cooperation of the G20, is preparing to create an entirely new tax code. This restructuring primarily favors large countries, for example by classifying tax competition between countries as fundamentally harmful. ...
However, the agreement reached by nearly 140 states in July 2021 disguises numerous practical problems that are already creating uncertainty, even before it enters into force. For example, the implementation of the so-called Pillar One has stalled seriously. Under this pillar, profits are to be redistributed to countries that don’t have the right to tax these profits under current tax standards. ...
Behind closed doors, there is already speculation about whether Pillar 1 will ever be implemented ‒ not least because the fate of the multilateral agreement in the USA is uncertain. An agreement without the US, the most important country of domicile for large digital companies, is pointless."

Outcome of OECD Tax Reform Uncertain - Avenir Suisse Arguments for streamlined implementation without government policy experimentation

Big Government Tax Man Eliminates Bank Secrecy Worldwide

Posted: 10/29/2014

Trigger

Just read “50 Staaten schaffen Bankgeheimnis ab”. Here is a Reuters article about the Berlin tax conference 2014. Both articles, regrettably or deliberately, tell us little about the details.

This is probably one of the most shocking news that unfortunately most citizens of the Western world will not care about although it is of paramount importance to each one. It’s about our money!

I do not yet fully understand the implications nor the exact terms of this new international tax agreement.

Totally Pales Edward Snowden

Whatever Mr. Snowden has revealed so far about the activities of U.S. intelligence services this is almost completely negligible.

All the hysteria of a loss of privacy on the Internet is dwarfed by these news!

A New Far Reaching Tax Agreement By OECD

Apparently, as of today 51 countries have already signed this new international tax agreement to allow for more extensive and comprehensive exchange of tax relevant information between national tax authorities.

The U.S. and FATCA (Foreign Account Tax Compliance Act) is reported to be a driving force behind this euphemistically called transparency and tax fairness.

Simply Lower Taxes

The best and cheapest way to reduce tax avoidance and tax evasion is to maintain low taxes. It is that simple!

The tax burden in most Western countries is way too excessive and burdensome. It is a form of expropriation or theft committed by government! When taxes become confiscatory, then evasion of taxes is a legitimate response by citizens! I have blogged here about this subject of taxation several times.

Minimum Wages Ought To Be Abolished

Prevalence & Justification

As of 2007, 21 of the OECD’s 30 member countries have statutory minimum wages.

There is no convincing justification for government imposed uniform minimum wages. These justifications are widely known and they are mostly sort of pseudo justifications.

Empirical Evidence & Economics

I believe, the score has long been settled. The preponderance of empirical evidence tells us that the disadvantages clearly outweigh the benefits. This is probably one of the few subjects were a majority of economists would agree on.

Minimum wages eliminate or prevent certain jobs; opportunities for unskilled employees are lost and so on.

One easily identifiable winner of minimum wages and in particular of any raise of minimum wages are labor unions as pay scales of their members in some of their contracts are tied to the level of the minimum wage. Thus, if the minimum wage is raised, such members of labor unions will see their pay automatically rise as well across the board.

Fact is there are not many employees who for a considerable period of their lives or for their entire lives depend on earning minimum wages.

Minimum Wages Are Fundamentally Flawed

Minimum wages should be completely rejected, because:

1.       They are a government imposed form of price control

2.       They are an infringement of property rights (e.g. the owner of a business has to pay more than the owner would otherwise voluntary pay)

3.       They are a partial expropriation of business owners

4.       Business owners are singled out to pay for a government redistribution policy

5.       They represent an indirect tax on business owners in the amount of the difference between what the employer was willing to pay and the minimum wage (it does not matter that this amount is not first paid to the treasury)

6.       They are an infringement of the freedom of contract (e.g. they also prevent a willing employee from working for less)

For all these severe and fundamental flaws it is high time to get rid of minimum wages!

Underground Economies In OECD Countries Or How The Government Burden Is Underreported

About Underground Economies

It has been known for decades that high tax developed countries have also developed a substantial underground (aka informal, unobserved, black market, hidden) economies measuring anywhere from a few percentag points up to 40% of GDP. One of the main motivations is evading taxation or regulation. An underground economy is not to be confused with criminal activities, but consists of largely legitimate economic transactions that escape statistical measurement and taxation, although there are likely grey arreas.

A Recent OECD Study

According to an article published originally in the Neue Zuericher Zeitung (NZZ) and republished by the Swiss think tank Avenir Suisse titled “Staatsquote ist nicht gleich Staatsquote” (the article is in German) on 7/1/2012 by Gerhad Schwarz, international comparisons of GDP are complicated by the fact that some countries officially or inofficially include some measurement of their underground economy to boost their GDP. The details of the procedures appear to be murky.

This article refers to a 2011 OECD study, but does not give details as to the source. Thus, I was not able to identify the underlying study.

Italy

For decades, Italy has been known to have an extensive underground economy. Italy has been a textbook case. Officially, Italian government statistics include about 16% of GDP as contributed by the underground economy. Other, conservative estimates are about 26% of Italian GDP. According to the above mentioned article, Italy supposedly introduced some upward corrections of national GDP at the time of its accession to the European Monetary Union (EMU) to meet the so called Maastricht criteria. Very convenient.

Key Economic Indicators Become Less Reliable

Measuring the underground economy is difficult at best. Arbitrary or ulterior intentions creep into government statistics.

The share of government in the economy becomes deceptive or at least underreported. The official economy is under a much more severe government burden when the share of the underground economy is large.

The share of government taxation becomes deceptive or underreported.

Solution

Instead of mixing the observable economy and the underground economy by hard to understand means it is better to have a separate national account statistics for the underground economy. More honesty would be better.