With the introduction of a global minimum corporate tax rate comes another confounding of consequence and cause from the deep well of voodoo economics, leading to what Nietzsche called; grave depravity of reason.
“Today’s agreement will make our international tax arrangements fairer and work better,” said OECD Secretary-General Mathias Cormann in a statement. “This is a major victory for effective and balanced multilateralism.”
First, what these economic “geniuses” we put our trust in do not realize is that one hundred years ago Einstein discovered everything in the universe revolves around relativity, the opposite of any totalitarian monism for the world. On evolutionary principle, we should not interfere in the relative sovereignty of other nation-states.
Second, a fixed minimum rate ignores and deflates the unique composition of each sovereignty. A tax rate of 15% in the US has different implications than the same percentage in South Africa, as each country deploys a different composition of taxations to provide governmental services. A global minimum tax rate reduces the freedom of countries to do what they deem is best for them.
Third, the minimum tax rate agreement is unenforceable, as governments are known to dish out all kinds of stipends to artificially lower income in return for labor. I would be very surprised if the U.S. will actually get this passed through Congress. And without the U.S. leading the charge, others will default on this arrangement as well.
Fourth, and most importantly, a tax rate should be variable based on how the company in question helps humanity adapt to nature’s entropy. Companies that damage human adaptability should be taxed higher for the societal damage they cause. But such an evolutionary meritocracy requires a government that understands we must first establish a human theory before we decide on taxation to those who skirt the theory.
Rules do not make a theory. We must first acknowledge nature’s first-principles that dictate what companies we would like to build to secure the excellence of the human species, use those principles to define a theory, embed the theory into a system, and then deploy rules to instill the collective trust in said theory.
We must stop putting bandaids on undesirable consequences from a human theory we have failed to define and implement. But what else can we expect from an institute that uses the regurgitation of hindsight to project foresight to break the norm?