[davvolun]

> This becomes a minimum wage for nations

Why is that a problem?

> removes the incentive to compete to be the home of corporate headquarters

No, it shifts the means of incentives. It's no longer a race to the bottom tax rate.

As I understand it, the problem with a border adjustment tax is implementation overhead; it would be expensive to audit. Noting that the IRS in the U.S. is not funded enough to investigate tax fraud as it is, this seems to be a major problem. You would also likely need foreign cooperation. There's no reason to believe a corporation headquartered in the U.S. needs to be truthful about their foreign revenue, and how would you know if they were without a foreign government's assistance.

The problem with implementing a world-wide minimum tax rate is organization, getting all countries to agree and stand by it. This is something the world has been engaged in doing for around 100 years now. We've had failures (League of Nations) and successes. There's no guarantee of success, but importantly, tax havens can be isolated if 130+ countries agree to do so, until they follow suit.

Basically, even if global minimum tax is not the optimal solution (which remains to be shown), it's better to have a sub-optimal solution that can be implemented than an optimal solution that's impossible.

[tastyfreeze]

Governments should earn their taxes the same as a person should earn their income. Governments "earn" their taxes by making the benefits of operating in a nation worth the tax. Price fixing and collusion is illegal for companies to practice. Being a government doesn't remove the deleterious effects of price fixing and collusion. An international base corporate tax rate makes nations not care if the tax rate is even worth it to businesses. If the tax rate isn't worth it then a business will close or just never start.

Lets say that a corporation choosing a home nation is akin to you shopping for a good refrigerator. The refrigerator manufacturers don't like that one manufacturer is selling their equal quality fridges at 50% less than everyone else. There are two choices for manufacturers. Collude and fix the price of refrigerators or figure out what the 50% cut rate company is doing and try to compete. If the manufacturers choose collusion they can continue with business as usual without making improvements to cut cost or improve quality. But, they will cut cost, possibly sacrificing quality, as that is now the only way to increase revenue. The incentive to improve is removed and the risk of a refrigerator cabal outsider pricing at 50% increases. If the competitors instead choose to work on reducing cost or improving quality you as the consumer get cheaper higher quality fridges. Under the price fixing regime, when an outsider starts selling a fridge at 50% the fixed price the cabal either has to destroy them, bring them in the fold, or remove the price fixing.

With price fixing an outsider will always arise. Competition is the only solution that doesn't destroy itself.

[davvolun]

> Governments should earn their taxes the same as a person should earn their income

So you're coming from the perspective that individual minimum wage is wrong, and applying that assumption everywhere. Thanks, but I absolutely disagree. I don't see a reason to discuss further when we're so far apart on our base assumptions of reality.

[throwaway34241]

> You would also likely need foreign cooperation. There's no reason to believe a corporation headquartered in the U.S. needs to be truthful about their foreign revenue

If I understand it right, you actually wouldn't need this much. Foreign revenue would be the other countries' responsibility. So the implementation would look something like a domestic VAT coupled with deductions for domestic expenses. It's true that the US doesn't have a VAT but that's been well-tested in many other places.

Agree with your conclusion though, they've got to prioritize how much time / political capital they invest into each issue and putting a huge amount of effort into this sort of thing (when it went nowhere recently and would likely go nowhere again) probably would be a mistake.