it's now time to take a very careful
look at a very bad tax weekend just held
in britain
g7 finance ministers packed up their
picnic baskets for a lovely frolic in
the english countryside
whereby they proceeded to raise the
entire world's taxes
or at least tried to janet yellen's
global tax surrender is one way to put
it don't mean it personally ma'am but
we just disagree on some small policy
issues
in some sense to make up for lost
competitiveness ms yellen will incur
from raising the corporate tax to 28
from 21
here at home and the minimum tax on u.s
profits overseas
she may be succeeding in getting the
other big countries to raise their taxes
too though at the end we may be taken to
the cleaners because foreigners will not
do what we want them to do
but the whole story is bad enough
because this group wants
130 countries to raise taxes
on investment capital formation and
job creation now another wrinkle here
some analysts are suggesting and dan
clifton as strategist
is one of them that the digital sales
tax threat on u.s tech companies
has been dropped and get this in favor
of a
nasty excess profits tax
wow that's new information i hope
ireland holds the line with their great
12 and a half percent corporate tax rate
in economic terms all this will damage
world recovery from the pandemic that's
why i think the g7 finance ministers
have
lost their mind but let's discuss this
with pennsylvania senator
and banking committee committee ranking
member uh pat tooney one of the great
experts uh
in on taxes senator timmy welcome back
um
thanks larry the obvious point here
is that we should never give up our tax
sovereignty
to anybody now this is a battle you're
well aware of
we've been having this with europe on
the digital sales tax and many other
taxes for quite some time
right and your judgment though is
yelling doing that is she just caving in
to these guys or
or what uh this is this is a combination
of disastrous policies larry
uh it's hard to know even where to begin
i i would start with this
what what she has done this whole
negotiation with these other countries
is all
a great confession that of the damage
they're doing to our economy if they go
ahead with their corporate tax
tax regime so much so that they admit we
better get all the other countries in
the world to raise their taxes too
or the competitive disadvantage will be
devastating
well what if all the other countries
don't agree and even if they do then
that means we're all in the same misery
together
this is a terrible idea the you know
they characterize
a competition for more economic freedom
as a race to the bottom
we should be winning that race they want
to make sure the race doesn't even
happen
and then as part of this terrible deal
it appears that there's this huge
capitulation
on the equivalent of a digital services
tax it's not called that
it looks like it's even broader than
that i think it's fair to characterize
it as you just did
as an excess profit tax that's all even
worse and what do we get for that
nothing this is this is just terrible
larry and it's going to be bad for our
economy if it happens
just to focus on that senator toomey
that last part
uh it i think what you just said makes a
lot of sense i hadn't quite put that
together um
in order to evolve through the
contentious digital sales tax
which we have been you know steve
mnuchin has been working on that i've
been working on
uh for several years uh through the oecd
so here's what um here's what dan
clifton says you
you know dan he's a smart guy he he's
he's suggesting
that the top 100 companies globally
uh buy revenue in revenue terms okay
we'll have a 10 profit margin okay
the communique this is why i think
there's some validity
the g7 communique calls for a 20
tax on profit margins over 10 percent
now senator that actually is a huge
increase in the marginal tax rate
and will be will be devastating to
capital formation technology jobs and so
forth
and it's overwhelmingly going to hit
american companies because
it's american multinationals that are
the biggest that will be the ones that
will be subject to this tax
so it's just terrible and it looks like
the capitulation on that was the price
that the europeans charged for them to
go along
with this massive global minimum tax
which was a bad idea in the first place
so uh this here's here's this
here's what we've got to count on larry
we got to count on
not every last democrat in the senate
being willing to subject the american
economy
to this kind of misery because there
will be no republican support for this
and they'll have to do this on a
party-line vote
that needs to fail um senator what i
don't know
we may not know for quite some time uh
but as you know
the biden proposals on taxes wanted to
take
the tax on uh foreign uh cash
by u.s companies uh from
more or less uh 10 and a half percent to
21
right um and then there's an intangible
part of that
uh as well now i don't know what of that
was incorporated in the g7 finance
ministers but i think apparently a good
deal
of it is but i don't think they'll go to
21. i'd heard that 12 and a half in
ireland is going to stop that
or maybe 12 or 13. i don't know whether
you know anything this is just
speculation
so my understanding is what they've
agreed to is 15 percent
which is still lower than what the biden
proposal
is and i'm not at all sure that the
irish and maybe hungarians and others
with lower rates are going to go along
with this
but at the end of the day maybe they'll
be pressured into a capitulation
i i don't know those dynamics very well
all i'm
concerned i mean not all but my primary
concern
is that we don't inflict this damage on
ourselves you know larry you and i both
know very well
after our tax reform and together with
the regulatory rollback
we had the best economy in 50 years
with record low unemployment with more
job openings and people looking for jobs
with accelerating wages and a narrowing
income gap
i would ask the biden administration
what about that did you not like
what is the problem with the best
economy in a half a century
why would you want to systematically
make it really difficult to get back
to that terrific economy that's the
problem here
you know i globally or domestically
we're not going to tax our way into
prosperity
especially after the war's pandemic in
100 years that was devastating for
the workforce and everything else um
senator let me just ask you another one
before we leave
um regarding these negotiations between
the white house
uh and the uh and the gop center capitol
and so forth
there was talk at the end of last week
that president biden would not
attempt to raise the corporate tax from
21 to 28
but he did want a 15 minimum tax
but you know minimum taxes on book value
basis
on book basis means you can't take
depreciation write-offs no expensing
as well as other legal uh deductions so
that's
almost if not as bad as raising the
marginal rate larry if you decide as the
biden administration has proposed to
have this 15
minimum tax on financial reported income
you are throwing out the entire
corporate tax code let's just face it
that's what you're doing
you're totally disallowing the dynamics
that we set up in place quite
intentionally
to encourage capital investment because
we know that capital investment
is how workers become more productive
that's how the economy grows
and workers get wage increases that's
exactly what was happening
and this idea of this minimum tax is
meant to completely demolish it
it's a disaster i mean i think we should
have made the hundred percent immediate
expensing
permanent senator toomey permanent well
you know
believe me that was my position we were
dealing with
the obstacles the procedural obstacles
that we had because no democrats would
work with us on this
with by far the better approach would
have been to make it all permanent
but we we did the best we could given
the the rules we had to contend with all
right
thank you for your time center to me
much more to be revealed we hope you'll
come back
and help us out on this one absolutely
thanks for having me lauren you