As global wealth inequality becomes more severe, a growing number of countries are turning to corporate tax enforcement to help close this gap. G7 finance ministers recently proposed their own tax accord to prevent tax evasion, and now, 130 countries have agreed to back a global minimum corporate tax rate.
The proposed 15 percent minimum corporate tax rate, announced last week by the Organization for Economic Cooperation and Development, would help dismantle tax shelters and reduce tax evasion by increasing accountability. The agreement also proposes a plan for taxing companies in countries where they conduct online sales, but have no physical presence.
The agreement will be further discussed by the Group of 20 (G20) countries at meetings this year in hopes of implementing the rate by 2023. Unfortunately, the agreement would still exclude excluded extractive companies like mining corporations and regulated banks.
Investigative journalists found that 55 of the US’ largest companies, including FedEx and Nike, paid no corporate taxes in 2020. A global corporate tax rate would ensure that tax funding is accounted for and goes towards infrastructure, education, and other critical public services.