Name? Janet Yellen
Westphalian identity? US American
Why is she in the news? United States secretary of the treasury Janet Yellen proposed a global minimum corporate tax that would help “make sure the global economy thrives based on a more level playing field,” and end a “30-year race to the bottom.”
Why do we care? It seems like the US wants to reclaim leadership in international economic policy. After four years of America first, Secretary Yellen now advocates that America first must never mean America alone. Oh, and she wants big corporations to pay their taxes where they are due, sounds fair.
Why should you care? For one, it is good to see the US back reaching for global leadership, vacuums, regardless of who left them, are never good in IR. And, if we as ordinary IR consultants and you as ordinary readers have to pay your share in taxes, why shouldn’t the corporate world do the same? On our how much you should care scale Yellen’s proposal scores an 8/10.
Who else cares? Angel Gurría, Secretary General of the OECD has been pushing for a policy like this for years now and made very little progress. Too many countries benefiting from the current system, including the US under Trump, were blocking legislation. Yellen’s proposal gives hope to Gurría that this idea finally succeeds as the OECD estimates that corporate profit-shifting robs national treasuries of $100bn-240bn a year. Just imagine how many vaccines one could buy with this money…
Any further comments? Let’s look at the individuals who would be affected by this the most, the world’s super rich. There are 2,365 billionaires who have seen their wealth increase $4 trillion, or 54 percent, during the pandemic year. While the IMF estimates that 95 million people have slipped into extreme poverty. Maybe Yellen is thinking about them? Or she wants to finance Biden’s infrastructure plan … do we really need to know?