Global corpate tax deal drops ‘at least’ from proposed 15% minimum: sources

Whenever a state or country wants to encourage a business to relocate to their area, one of the levers they use is to lower the corporate tax rate. The trade off is the workers would be on salary and they would have to pay state taxes. However, the math never adds up equally and on balance the workers pay more in taxes and the corporations pay less. This idea has been going on for years and generations but it tends to mean government coffers are in deficit because they do not collect enough money. Most states can not run a deficit or the process of tax reduction continues.

In article by Reuters, there are talks in Paris, lead by Chairman of the Reserve System Janet Yellen (as opposed to the cuts made by President Trump) to have a floor across all countries of 15% tax rate.

Ireland is the lowest corporate tax rate in Europe and many multinationals have their home in Ireland at least during the AGM time period. Ireland objected the legal language of at least 15% and to appease the Irish, the Irish wanted a floor not a starting place of 15% only to see it be raised. Given that countries around the world have a multitude of governments orientation, Ireland did not to see the tax go higher than 15% which would mean an increase from the 12.5% at the present.

Linking to dividend paying stocks, we all hear the phrase let them pay their fair share; what the fair share is what the meetings in Europe are about. Every President and CEO will tell you the same thing, but then they go the CFO who gets a bonus if taxes are as low as they can be and will tell you all the other taxes the company pays. It is hard to see low taxes going being changed soon.

There are more questions than answers, till the next time – to raising questions.

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