EDITORIAL: Global tax collusion scheme now on the rocks

If a cabal of private companies conspired to set prices to guarantee profits, the progressives now running the Democratic Party would be banging on the table for criminal prosecutions in the name of justice. But when government actors do precisely the same thing on tax rates, such protesters go noticeably mute.

Last week, Sen. Joe Manchin announced he was unlikely to support a global minimum tax proposal being pushed by Treasury Secretary Janet Yellen and financial officials in 130 countries. The plan, which has two main features, is intended to stop nations from attracting U.S. and other corporations with favorable tax rates. It’s a classic example of collusion intended to limit competition among countries in order to propagate a global tax grab.

Despite a verbal agreement last year, few nations have actually yet imposed such laws — and Sen. Manchin’s opposition will make it more difficult for the United States to jump on board. That’s good. “Nothing would be worse for U.S. competitiveness,” the Wall Street Journal noted in May, “than for Washington to rush into implementing a ‘global’ tax deal that isn’t global at all.”

The idea that a worldwide 15 percent minimum corporate tax rate would make the United States more corporate friendly is folly. Instead, it would make it easier for Democrats to increase taxes domestically without having to worry about driving their targets to lower-tax climes. Why would the United States unilaterally surrender any arrow in its quiver when it comes to global competitiveness, particularly when the 2017 Trump tax reform has led to unprecedented corporate tax receipts?

“Global tax cartels are as bad as they sound,” Veronique de Rugy of George Mason University wrote last week. “They are explicitly designed to enable governments that refuse to cut their profligate spending and create friendlier tax environments to get more revenue. They are bad news for tax competition and fiscal sustainability” and will lead to a reduction in “the investments, innovation and economic growth that contribute to our living standards.”

It’s worth noting that the global minimum tax brainstorm is brought to you by the same folks who birthed raging inflation (only “transitory”) and laid the groundwork for regular energy disruptions by forcing an unsustainable rush to renewables before they’re ready to replace fossil fuels. What will they think of next?

Winston Churchill once said, “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries.” That nicely encapsulates much of the progressive agenda, including the global minimum tax gambit.