In her editorial today, former Chair of the Federal Reserve and current Secretary of the Treasury, Janet Yellen, opines in the WSJ (4/8/21 – “A Better Corporate Tax for America”). She claims the 2017 tax law was a bust. Using selected statistics related to corporate taxes only, she claims the changes were a “mistake” and resulted in unsustainable prosperity. She ignores the plethora of other statistics that support the changes were a spectacular success. She deftly declines to mention how it reduced the income gap, raised in real terms the incomes of nearly every group she and her cohorts profess to be working hard for, and saw historical reductions in poverty. Some mistake!
To right this mistake, she proposes a policy based on naivete. She contends that through discussion, competing economies will acquiesce to a plan to coordinate corporate tax policy. Her proposal will prevent a “race to the bottom” of corporate taxing policy. Apparently, competition is something to be avoided. Instead, she proposes a sort of OPEC for tax policy. How’s that working for the OPEC countries?
With all the good will this administration is amassing, I’m sure Ireland will be the first to agree to go from a 12.5% tax rate for corporations to 28%. (Ireland actually has 2 rates depending on the source of income; 12.5% and 25%). If you can’t even get NATO to follow its own rules, how successful do you think we’ll be coordinating tax rates? Joe likes to bundle things so maybe we can throw tax rates in with the Iran nuclear talks or with China on the Uighurs. While some may see this as conflating disparate topics, this administration can make a case for their relation to one another. If they so choose, I suggest these discussions, like the prospect of coordinated tax rates, will go down in flames. To think otherwise is naive.
Current Day Publius 