The Biden proposal for a global minimum corporate tax rate, explained
To eliminate tax havens such as the Cayman Islands, the Biden administration is working to get all countries to agree to a minimum corporate tax rate.
The “Double Irish, Dutch sandwich” sounds like a menu item, but it’s actually a complicated business scheme where companies open offices in Ireland and the Netherlands, two countries with low corporate tax rates, and move money between them to minimize their tax burdens. Tax havens (and tricks to manipulate them) are now a common part of multinational business practice. By taking advantage of legal loopholes and opening up subsidiaries in places such as Bermuda or the Cayman Islands, corporations avoid paying billions of dollars of taxes, while ordinary citizens and domestic businesses keep paying their fair share. In 2016, 73% of Fortune 500 companies reportedly operated subsidiaries in tax-haven countries.