(CNSNews.com) - On Saturday, the G-7 finance ministers announced their support for a global minimum tax of "at least 15 percent" on multinational corporations.
Large companies with profit margins above 10 percent could be taxed on at least 20 percent of the profit above that 10-percent level in countries where they make sales.
The Biden White House called the tentative agreement "another example of America reasserting its leadership on the world stage" to secure "a global tax system that is equitable and equipped to meet the needs of the 21st century global economy."
Biden's goal of setting a minimum global tax on multinational corporations is intended to discourage them from moving to low-tax havens overseas, as Biden and his fellow Democrats raise corporate taxes here in the U.S.
But some Republicans say this is the wrong move: "This is without question the biggest economic blunder in our lifetimes," said Rep. Kevin Brady (R-Texas), the ranking member of the House Ways & Means Committee.
"This is not, as the president said, a victory for America. It is a surrender," Brady told Fox News on Monday.
"What the president essentially did was to go to China, Japan, our other foreign competitors and say, look, we're raising taxes. Our companies will be less competitive. We're going to move and lose jobs, manufacturing, headquarters overseas. Won't you help us?
"And what our foreign competitors essentially said, we will be glad to take both your jobs and your tax base, the same tax base you will need to fund your government in the future. And so, in essence, President Biden is turning over the sovereignty of tax policy to foreign countries."
Brady said if Biden's proposed corporate tax rate of 28 percent goes through -- "and America has a tax rate worse than China, and on par with Syria, we will see a second wave of U.S. jobs and manufacturing moving overseas. So, who gets hurt there? It's working families," Brady said.
(China is not part of the G-7, which includes Canada, France, Germany, Italy, Japan, the UK and the US.)
Treasury Secretary Janet Yellen, in her remarks on the global tax agreement, said a minimum tax of at least 15 percent "would end the race-to-the-bottom in corporate taxation and ensure fairness for the middle class and working people in the U.S. and around the world."
Larry Kudlow, an economic adviser in the Trump White House, called it "remarkable" that a U.S. Treasury secretary would press for such a global tax deal. "It is absolute surrender," Kudlow told Fox News's Laura Ingraham on Monday:
"It gives up voter sovereignty, for heaven's sakes. This thing came out periodically under President Trump, and he would always say, the only people who can decide American tax policy are American voters. Not the G-7, not the OECD, not the G-20.
"By the way, all this does is jack up taxes even more," Kudlow continued.
"There is a provision in there, Laura, besides the 15 percent minimum tax, which is bad enough -- there is a new provision that hasn't been accurately and adequately reported yet, and that is if a company has 10 percent or more profit margin, which is not all that much, particularly after getting clobbered by the pandemic, then this deal would allow that company to be taxed up to 20 percent or even more. Now, that is remarkable. That is so antagonistic to capital formation, investment, plants and equipment, jobs, real wages, family incomes."
Kudlow noted that China is not part of the G-7's global tax discussions -- "and they will not play by any of those rules," he said:
China -- under Biden's tax policies, China will have significantly lower business taxes than the United States does. And China will have significantly lower capital gains taxes than the United States. And of course, this may only be the beginning unless it's all stopped.
This race to the bottom -- you know who wins the race to the bottom? Ireland, with a 12.5 percent corporate tax rates. You know who put us on the right road? Donald Trump, who took corporate tax from 35 to 21 percent. And he didn't have any of these excess profits tax. The idea that raising your taxes is going to keep companies or jobs here is just -- it is counterintuitive. It's utter nonsense. People will flee, just as they did before the Trump tax cuts.
But again, this is remarkable because with so much ease so far, our U.S. Treasury and presumably the White House is willing to give away our sovereignty. Who is running this country? Is the OECD running this country? Is the G-7 running this country? Or are the voters and businesses and workforce of the United States running this country?
Kudlow said leftists are out to "destroy our economy."
"Look, they may not admit it. They have no interest in economic growth or prosperity or work or jobs and wages. They want redistribution. They want to punish success. And now they are willing to do it on a grand, global scale. So we will lose. Europe will have lower taxes than we will. China will have lower taxes than we will. It's a scorched earth policy.
"Biden's idea, this is like some green worker's paradise, that's what this is. And it's nutty. It's nutty as a fruitcake."
Yellen conceded on Saturday that "this isn't a finished agreement. There are details still to be worked out," she said:
"So what we've tried to emphasize in the G7 statement that we put out today, is that this group of countries are very supportive of two important pieces of what needs to be an agreement, namely an agreement among all these countries to tax, to have minimum corporate tax rates that apply to their companies on a country-by-country basis of at least 15 percent, and an agreement that we will reallocate taxing rights in Pillar One and apply it to the most profitable companies. So, there remain details yet to be worked out, and we will be addressing those in the run-up to Venice."