Ken Fisher Examines the New Global Tax Proposal and What It Means for You

Transcript

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lately as we move toward the back part
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of july there's a lot of buzz about the
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proposed global
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corporate
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minimum tax of supposedly 15 percent
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and that raises people having concern
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that uh this could be a
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a
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negative impact to corporate profits uh
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which could then impact the stock market
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etc etc and should they be worried about
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such a thing
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the uh
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simple answer in my opinion is no
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the
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um
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i've written
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several pieces uh
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on
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in in several different places
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uh that i posted on my twitter feed uh
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and uh
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on real clear markets and linkedin and
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uh
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in
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various other places that
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indicate that
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we've been going through what i've
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called president biden's magical
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disappearing tax hike process
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where the original tax hikes of all
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kinds that he has proposed are
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slowly just kind of disappearing and
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sometimes not even so slowly
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they just
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seem to just sort of fade away and at
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the rate that he's been going i've been
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suggesting that you could get off toward
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the beginning of the next u.s government
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fiscal year and he could actually be
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proposing tax cuts by the time we get to
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the beginning of 2022
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but with this one the global
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corporate
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minimum tax
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the thing you have to look for is when
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is hell going to freeze over because
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it's shortly after that that this is
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going to pass
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now let me take you through why
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just
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as i speak
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three days ago
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treasury secretary yellen
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indicated in no uncertain terms
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that she was having great success with
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this
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and she expected to be back
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trying to get congress to ratify it
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in the united states of america after
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getting lots of other countries to agree
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to it
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next spring
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i just want you to think through what
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that says i just want you to see the
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facetiousness in that the irony of it
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because next spring
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nothing's going through congress of any
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significance at all by the time you get
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to next spring
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that
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biennial
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congressional redistricting
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will have frozen several dozen congress
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people into inaction as they don't even
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know who their voters will be in the
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2020 mid to midterms
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secondarily
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primary season will be upon
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so many of these people but some of them
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primary seasons a little bit later
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but the primary season will be launched
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in flush full going hard
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and as that happens they'll be sitting
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there focused on the campaign not on
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trying to do something that might come
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back to bite them immediately when
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voters in their district in the swing
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districts don't like it and anything
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extreme voters in the swing districts
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don't like
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as we see treasury secretary yellen make
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that announcement she's effectively
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making the announcement in a sense so
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that president biden doesn't have to
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note it wasn't president biden saying
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these things his treasury secretary
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yellen
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kicking that it will never happen can
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down the road into next year at a time
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when nothing will happen
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but
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just stopping and thinking about this
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topic another way
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there's an interesting construct the
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construct is that all these countries
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are going to agree to impose a similar
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minimum tax
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such that
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if a country goes to a tax haven
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ireland is often considered a tax haven
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but you know there's the classic ones
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like the cayman islands and bermuda but
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even if you just do a google search on
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tax havens you'll see singapore and hong
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kong listed as tax havens where the tax
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rates are lower than what they're
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commonly getting in other countries
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the notion of having a broad universe of
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countries
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all agree to a tax rate
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which of course has never happened
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before
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is a little like trying to create a
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cartel
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and cartels blow apart
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why because out of 130 countries in the
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world
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there's too many of them that will see
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an advantage that if they drop their tax
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rate below the level
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that others are agreeing to
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corporations will shift their residency
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to there to try to take advantage of the
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lower tax rate
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there's provisions in the discuss bill
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to try to run a tax overlay
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from the country of origin
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on top of a low tax rate
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that
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tax haven might allow for
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but mind you
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the reality of trying to do that is very
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very treacherous
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so what i'm trying to say to you is
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between now and as treasury secretary
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elena said next spring when she would
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hope to bring this back to congress
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she's going to be talking
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again to try to establish what the terms
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of this might be with the g20
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coming up here in the end of
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july 27th and 28th of july which is why
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this topic has been surfacing a lot
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lately
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after that she's got to go to the next
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set of meetings in october they don't
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even have the agreement yet of how you
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define what revenue is commonly across
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the countries
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uh how they define how this tax is
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constructed uniformly in different
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sectors that don't all do their
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accounting the same way
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this is going to get broken down into
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the devil in the details
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and ultimately
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shift to where
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little to nothing comes of it
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and gets largely forgotten
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and what you just heard treasury
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secretary yellen do
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this last weekend
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was exactly to tell us that she's
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kicking the can and down the road into
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the it will never happen department so
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that we can forget about it by next year
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and that's what i'm telling you as to
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why you don't have to think about this
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if you want it i'm sorry it's not going
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to happen
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if you don't want it feel relieved
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because it's not going to happen thank
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you
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[Music]
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you