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Corporate tax doesn’t have to be a “race to the bottom”

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U.S. Treasury Secretary Janet Yellen

U.S. Treasury Secretary Janet Yellen Alex Wong/Getty Images

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Let’s talk about a “global corporate minimum tax”… stay with us here.

You might remember our episode on the tax gap, the billions unpaid by some of the richest Americans. Better enforcement of the existing tax law could yield big returns, but that’s just for individuals. Corporations pay taxes too — that is, when they aren’t parking their money in overseas tax havens.

Since the ’80s, governments have slashed corporate taxes to compete for those dollars, leading to what Treasury Secretary Janet Yellen has called a “race to the bottom.” The Biden administration is hoping to remove some of that incentive with a tax floor. It could reshape how money moves between multinational companies and governments and, more urgently for the White House, help pay for an ambitious infrastructure plan.

On today’s show, Urban-Brookings Tax Policy Center senior fellow Thornton Matheson talks us through who benefits from the tax trends of the past 30 years, which countries are on board with Joe Biden’s proposed 15% minimum and the chances of it actually happening.

Later on, we’ll do a little media soul-searching around tennis star Naomi Osaka and journalist Emily Wilder, and hear from a listener who’s hearing a lot of cicadas right now. Plus, did you know there’s a difference between a possum and an opossum? The wonders never cease.

When you’re done listening, tell your Echo device to “make me smart” for our daily explainers. This week we’re explaining Styrofoam, air conditioning and cruise ships. You can hear them all here. And don’t forget to subscribe to our newsletter! You can find the latest issue here.

Here’s everything we talked about on the show today:

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