Dan Mitchell on the global tax cartel and California’s economic suicide - EP122

Economics Explored

136 countries have agreed to implement a global minimum corporate tax rate of 15%. Renowned US public policy economist Dr Dan Mitchell explains why he thinks this “global tax cartel” is bad news. Dan also explains to Economics Explored host Gene Tunny how California is committing “economic suicide”, and why entrepreneurs are moving to Texas, Nevada, and Florida, among other lower tax states.

About this episode’s guest - Dr Dan Mitchell

Dan Mitchell is Chairman of the Center for Freedom and Prosperity, a pro-market public policy organization he founded in 2000. His major research interests include tax reform, international tax competition, and the economic burden of government spending. Having also worked at the Heritage Foundation and Cato Institute, he has decades of experience writing editorials, working with the public policy community, and presenting the free-market viewpoint to media sources. He holds a PhD in economics from George Mason University.

Links relevant to the conversation

Relevant posts on Dan’s International Liberty blog:

https://danieljmitchell.wordpress.com/2022/01/13/yes-starve-the-beast/

https://danieljmitchell.wordpress.com/2022/01/03/the-need-for-global-tax-competition/

https://danieljmitchell.wordpress.com/2021/11/01/the-global-tax-cartel-is-a-victory-for-politicians-over-workers/

https://danieljmitchell.wordpress.com/2016/05/11/the-necessary-and-valuable-economic-role-of-tax-havens/

https://danieljmitchell.wordpress.com/2022/01/12/california-and-economic-suicide/

Other relevant material:

https://www.weforum.org/agenda/2021/11/global-minimum-tax-rate-deal-signed-countries/

https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/media-releases/g20-endorses-global-minimum-tax-rate

https://www.reuters.com/business/ireland-backs-global-tax-deal-gives-up-prized-125-rate-2021-10-07/

Information on incidence of corporate taxation

In his textbook Public Finance and Public Policy (6th edition, p. 748), MIT’s Jonathan Gruber wrote:

Suarez Serrato and Zidar (2016) estimate that 35% of corporate taxes are shifted to wages, 25% is shifted to land owners (through general equilibrium effects), and 40% is borne by corporate owners.

The study Gruber cites was published in vol. 106, no. 9 of the American Economic Review:

Who Benefits from State Corporate Tax Cuts? A Local Labor Markets Approach with Heterogeneous Firms

Thanks to the show’s audio engineer Josh Crotts for his assistance in producing the episode.

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