Yellen: Progressives of the World, Unite!

Then-Federal Reserve Chair Janet Yellen in Washington, D.C., in 2017. (Jonathan Ernst/Reuters)

The New York Times reports:

Treasury Secretary Janet L. Yellen made the case on Monday for a global minimum tax, kicking off the Biden administration’s effort to help raise revenue in the United States and prevent companies from shifting profits overseas to evade taxes.

Ms. Yellen, in a speech to the Chicago Council on Global Affairs, called for global coordination on an international tax rate that would apply to multinational corporations, regardless of where they locate their headquarters. Such a global tax could help prevent the type of “race to the bottom” that has been underway, Ms. Yellen said, referring to countries trying to outdo one another by lowering tax rates in order to attract business.

Her remarks came as the White House and Democrats in Congress begin looking for ways to pay for President Biden’s sweeping infrastructure plan to rebuild America’s roads, bridges, water systems and electric grid.

This provides a nice little example of how incapable progressivism is of leaving room for genuine diversity of practice. Not only must progressives ride roughshod over the 50 American states in order to make their plans workable, but, ultimately, they must ride roughshod over every other country, too.

We hear this “race to bottom” language all the time in a domestic context when, say, Florida or Texas decides to lower taxes or cut regulations or diminish spending. Now, we’re seeing it used globally, as an unashamed means by which to stamp out the dissenters and prevent them from competing with America. In and of itself, this is distasteful to me, for the same reason big federal schemes are distasteful to me here in America: I like the fact that the world is full of nations that do things different from one another, and I wish to keep it that way. But, leaving that to one side, I am slightly confused as to how this fits in with the general progressive worldview, which is that the United States is a bully. For many smaller nations — nations that have less economic clout and fewer people — lowering taxes to encourage investment is a primary means of gaining a competitive advantage. What right does the United States have to try to take that away so that Joe Biden can pay for a set of “infrastructure” plans that don’t benefit them in the slightest?

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