Treasury Secretary Advocates for Higher Corporate Tax Rates, Baffling Economists
Treasury Secretary Janet Yellen has an interesting view on taxes. According to her, the global corporate income tax rate is too low. Yellen believes that this low rate needs to be higher if the world wants to see economic prosperity. It is a strange world when more taxes are looked at in a positive view.
Yellen Impressing Her Taxation Views on Other Countries
What is most concerning to some leading economists is that Yellen is doing more than just advocating for American businesses to raise their taxes. She is also trying to convince other nations to raise their corporate taxes as well. It has been her mission to convince the other member nations of the G-20 to do like the U.S. and tax even more.
If Yellen has her way, all of the advanced economies of the world would form a tax cartel designed to keep outdoing each other with high taxes. She was a recent advocate for the idea of a preliminary pact among the G-20 members to change how countries tax multinational organizations.
The Problem With Cartels
The problem with cartels is that they are eventually convinced to cheat the system. By offering discounts on the sly to customers, they are able to get ahead of their fellow cartel members.
There are also external threats that threaten these cartels.
For example, if the producers are indeed successful in bringing in higher profits, other external firms will then be tempted to enter the industry and harness the advantages created by the cartel.