Thomas K. | Red Phoenix correspondent | Ohio–

In global trade news, U.S. multinational corporations will be exempt from paying new global minimum taxes. Avoiding this minimum tax requirement will deeply affect the United States competitiveness in the global trade market. As a result, consumer costs will rise and the economy will stagnate, creating the conditions for the further descent  into  fascist reaction.

Global Anti-Base Erosion Rules (GloBE) is a plan crafted in 2021 by the Organization for Economic Cooperation and Development (OECD) to ensure that large multinational enterprises (MNEs) pay a minimum level of tax on their income. Recent amendments to the plan now exclude U.S.-based multinational corporations. To gain an example of some of the MNEs involved see a list of Fortune 500 companies. The tax revenue these companies are dodging would be directly funding public programs. The Trump regime directly negotiated on behalf of U.S. Capital to ensure that they could not be taxed further than the U.S. government taxes them already (currently sitting at 13.125% due to both the 2017, and 2025 Trump Tax plan).

The U.S. government negotiated on behalf of, and at the request of, U.S. corporations to not pay additional “top up” taxes that would fund public infrastructure and social programs. This is further evidence into the rapid descent into fascism as funds are divested from social welfare programs in favor of increased militarization of society. 

As digital business models continue to trend upward, many debates have developed on the issue of taxes, the main question being: Whose tax laws apply? As many digital business models don’t require a physical presence in the country or location of consumption, so the debate arises around the issue of the country or location of the sale, and as all working class people know, company owners are very good at dodging the rules. Using accounting and legal tricks, aided by a digital ecosystem, massive multinational companies are able to route sales profits into tax havens, allowing them to misrepresent sales numbers, reduce the amount of taxes paid, or completely dodge taxes as a whole. The OECD presented a report to G20 “leaders” showing how MNEs use profit shifting to escape paying taxes to the tune of about 100-240 billion in annual revenue, equivalent to a 4-10% global tax corporate income tax. 

The OECD and G20 combined efforts to implement a two pillar framework that would help cut down on the profit shifting and hold all MNEs “equally accountable”. The first pillar was establishing new tax laws ensuring MNEs pay taxes where customers are located. The Second pillar sets a global minimum corporate tax rate of 15%. An extremely comfortable tax rate that the working class can be assured was argued down to the very decimal. As of 2024, the United States had a global corporate income tax rate of 10.5% (number to change in 2026), this plan being put in place would have only increased US based MNEs taxes by 4.5%. Once again a completely pitiful number. 

Through the Trump intervention and the amendments to the plan the loss in tax funds to the working class based on Walmart’s Gross global income alone is 26,924,400 USD (gross global income x proposed tax rate). It was reported by the World Food Program USA in 2022 that it would cost 40 billion USD per year to end world hunger by 2030, this figure seems very attainable if we would only hold our corporations financially accountable (pun intended). The absolutely absurd levels the current American regime will go to protect their capital masters is sickening. Once again this kneeling to profits move will further affect the social programs and public infrastructure, this is the active descent into fascism. Many liberal news outlets will explain how this is going to create issues for the future of U.S. based MNEs, saying an uneven tax landscape will negatively impact U.S. multinational corporations. They claim it will force the business owner to pay a higher percentage in taxes without a return in revenue.

Once again, members of the working class will fully understand that a raise in taxes will create a raise in product price to “shield shareholder profits”. This will lead to stagnation in the markets, causing disruptions in global trade (I.E. Market Loss), forcing direct imperialist action to maintain control of, or to capture ground in, the marketplace. As ground is lost abroad the deepening of the fascist state at home will continue. Many will lose their jobs, and those that maintain employment will see wages fall through the floor.

In response to the deepening of exploitation, the working masses should seek to organize. As multinational business conglomerates and monopoly powers rise, the need for industry wide unionization becomes more and more dire. Trade unions need to organize together under strong working class principles guided by members of the working class, not opportunists and agents of capital. We must strengthen our front line defenses in the labor struggle to be able to resist the impending fascist onslaught. We must organize at all levels of community. As capitalists love to take credit for their “success” we are wholly prepared to give them the credit of their failures, the conditions they have created will be the conditions of their demise! Agitate, Educate, Organize!

Categories: Economy, U.S. News