What to make of the ‘historic’ G7 tax deal

The proposal is great in principle, but it is too early to speculate on what it will achieve in practice.

Earlier this month, the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) announced an “historic agreement” on international tax policies. It sets a minimum 15 percent tax rate for multinational entities. It intends to stop “the global race to the bottom” in corporate tax. Or at least, to slow it down. Before anyone goes into “they’re raising taxes” hysteria, the corporate tax rates of the G7 nations currently range from 19 percent in the UK to 32 percent in France. It’s 21 percent in the US. More significantly, this refers to “statutory” tax rates – the rate companies might pay in a world without creative accountants, expensive attorneys and lobbyists.