What in the World Is a Global Minimum Tax?

Why It Matters

Council on Foreign Relations

News

4.2 • 876 Ratings

🗓️ 14 April 2022

⏱️ 24 minutes

🔗️ Recording | iTunes | RSS

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Summary

For years, large corporations have exploited international tax laws to pay less taxes. But last year, 137 countries backed a potential solution: a 15 percent corporate tax applied regardless of a company’s location. The reform could raise global tax revenues by $150 billion a year, but as advocates garner political support, there are significant roadblocks. Featured Guests: Shu-Yi Oei (Professor, Boston College Law School) Richard Rubin (U.S. Tax Policy Reporter, Wall Street Journal) For an episode transcript and show notes, visit us at: https://www.cfr.org/podcasts/what-in-the-world-is-a-global-minimum-tax

Transcript

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0:00.0	In 2020, five tech giants, Apple, Amazon, Google, Microsoft, and Facebook had a combined revenue of more than $1.2 trillion. It makes sense though, right? Like I for
0:16.7	one spent a lot of time on my computer that year. But many were outraged to learn how little they had paid in taxes.
0:25.0	This highlights a story that has been unfolding for decades.
0:29.0	A Silicon Valley moved fast and broke things.
0:32.0	They also got really good at finding ways to pay the lowest
0:36.7	tax possible, which sometimes is no tax.
0:41.2	Many of them moved to countries with lower tax rates, resulting in a race to the bottom.
0:46.0	Countries competing with each other to offer lower and lower rates.
0:51.0	The result? Hundreds of billions in lost tax revenue around the world.
0:57.0	Large corporations always seem to be two steps ahead in the tax game.
1:01.0	But there may be a surprising change in store. An international
1:05.1	proposal to charge companies the same tax rate no matter where they go. I'm
1:11.0	Gabriel Sierra and this is why it matters. Today a global minimum tax the
1:17.0	solution that could change it all and the long road ahead. Can you tell me about this new idea called Global Minimum Tax?
1:27.0	What is it?
1:31.0	How does it work? Can you tell me about this new idea called Global Minimum Tax?
1:33.4	What is it?
1:34.2	How does it work?
1:35.4	Generally, a Global Minimum Tax
1:37.0	is exactly what it says.
1:39.4	This is Shuyi Wee.
1:41.1	She's a professor at Boston College Law School and teaches students all about the wide world of tax law.
	...

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