Global policy reform. A start.
‘The US treasury secretary, Janet Yellen, speaks out. She suggests what is needed is for ‘ governments around the world to support the US in setting up a global minimum corporation tax rate. She did not specify a rate but it comes at a time when the US government is trying to raise the nation’s internal corporation tax rate from 21% to 28%.’
‘Yellen said that imposing a global minimum would “make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations”, and that it would spur “innovation, growth and prosperity”.’
The US president Joe Biden seems to be on the same track. With all the money being printed and thrown around, these ideas for financing must be considered.
‘WASHINGTON — The Biden administration unveiled a tax plan on Wednesday that would increase the corporate tax rate in the U.S. and limit the ability of American firms to avoid taxes by shifting profits overseas.’
Google ‘Biden on tax reform’ and discover his triple tax proposals.
In Australia, we are still at the money creation game. The coming budget will provide chapter and verse, so I will spare you my guesses and madder ideas.
Here are some other (non-related} thoughts that need consideration.
Last week, Geoffrey Blainey warned about the proposed new agenda for school children.
image: 'Geoffrey Blainey' by Peter Jonson
The draft year seven syllabus will require students to study the First Nations people of Australia and ‘the sophistication and significance of their cultures’. Blainey argues: ‘Students should learn about traditional Aboriginal history, especially its successes, but why can’t they also study the stories of Greece and Rome? After all, they were the mainsprings of the civilisation most Australians inherit.’
This article is not to be missed if you have young children or grand-children. Here is the link.
Another extraordinary proposal is 2 % deposit to help 10,000 poor women ‘buy’ a house. I predict this will have at least two bad outcomes.
1. Many such ‘purchases’ will go bad and there will be tears for all of the ‘buyers’, the Treasury and Treasurer. One hopes that memories are not so short that we have all forgotten Fanny Mae and Freddie Mac.
2. The plan will make it harder for poor people who do not receive the ‘deposit’ and indeed the next slightly less poor group to find a way to buy a place to live.
There is a more general point about helping people at the bottom of the income pile. Direct financial assistance for Group A (the poorest) makes life harder for Group B (the second poorest). We see this also in the pre-school funding arena. More funding for the worst off raises the cost of child care for everyone else. Mrs T believes that in the end we will take the path of many northern countries and have state funded pre-schools just as we have state funded schooling for all who want it.
So what is to be done to pay for all of this? President Biden and Mrs Yellen have an idea. Tax corporates and the really wealthy people to pay people at the bottom to be able to have a decent life.
In my view, this is a crucial reform. Especially in the USA, the gap between the richest and other, especially poorer people, is growing at an obscene rate and needs to be checked.
Fiona Prior explores (and enjoys) a bit of delinquency. More here.