The thing to remember about the global minimum tax on corporations the leaders of the Group of 20 endorsed today is that if those politicians were leaders of corporations they’d be brought up on charges under the Sherman Antitrust Act. That’s the law that begins with the famous sentence: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations,* is hereby declared to be illegal.”

No doubt our characterization of the situation would be disputed or mocked by the Democrats who concocted this proposed pact to fix a minimum price for doing business in participating countries. We, ourselves, have no illusions that, say, Secretary Yellen or other advocates of this scheme are going to be put in any dock, though we wouldn’t discount the danger of civil challenges in various courts. It’s the principle of the thing that gets our goat.

For what the scheme endorsed at the G20 aims to do is prevent countries around the world from competing with one another in respect of their tax rates. Participants in the plan agree not to lower the price of doing business in their country below a tax of 15%. Maybe General Motors, Ford, Toyota, Volkswagen, etc. will take a page out of the international tax-rigging playbook and agree to a new, universal, sky-high basic sticker price.

It happens that we spent a decade or more as a foreign correspondent covering this issue. Namely, the scramble of companies to find the countries that are, in tax terms, the most attractive to base their businesses. And the simultaneous scramble of governments in Europe and elsewhere to configure their taxes in a way that makes them more attractive than tax rates in neighboring countries or continents. Our editorial advice was — and is — to go for it.

And how governments did — and with salutary results. The Washington Post reckons there has been a decades-long decline in tax rates on corporations across the world. The Post’s story today linked to another that it issued in 2018. It cites a study finding that corporate tax rates across the globe fell by more than half since 1985. That long decline alarms what the Post calls “experts,” who say that it has “deprived” governments “of revenue to fund social spending programs.”

Yet why would plunging tax rates not be a good thing? After all, they ignited the Reagan boom, which carried America and other countries into the 21st century. They helped The Gipper become the great uniter (he won his second term with 49 states). Tax cuts enabled corporations to keep more profits and eventually distribute them, including to pension funds of government and private employees. Corporate profits helped build our middle class. Why mark “social spending” as the priority for tax take?

The New York Times has a particularly tendentious news dispatch in respect of the scheme endorsed today at Rome. It describes the announcement as marking “the world’s most aggressive attempt yet to stop opportunistic companies like Apple and Bristol Myers Squibb from sheltering profits in so-called tax havens, where tax rates are low and corporations often maintain little physical presence beyond an official headquarters.” Is the Times not an “opportunistic” company?

Our own view is that the G-20’s tax-fixing scheme is yet another reminder of the danger of multilateral institutions — even informal ones like the G-20. It’s by no means clear that the 15% tax price-fixing will go into effect. This is a good time to remember why America refused to join, say, the League of Nations. It turned out that the Senate, in its wisdom, refused to ratify the League treaty, lest they abridge our constitutional powers. The more countries that join the G-20 tax-scheme, the greater the logic of America staying out.

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Image: Drawing by Elliott Banfield, courtesy of the aritst.

* Emphasis added by the Sun.