The Global Trend: A Strategy of Tax Reduction

 

October 9, 2024

The global corporate tax race has shown that lowering taxes is an effective way to stimulate business activity, attract investment and promote economic growth.

The Trump administration’s Tax Cuts and Jobs Act was a major step forward, simplifying the tax code, lowering corporate taxes, and modernizing the system to be more competitive. However, more can still be done to position the US as a leader in attracting global business investment. Further reductions in the corporate tax rate, permanent investment incentives, and simplifying tax structures would help ensure that the US continues to be a beacon for innovation and economic growth.

The Biden-Harris Presidential Administration on March 11/24 sent Congress a fiscal year (FY) 2025 budget that proposes to increase taxes by nearly $5 trillion for corporations and individuals with incomes above $400,000.  Many of the Administration’s tax proposals -- including a proposal to increase the corporate tax rate to 28% and impose a 25% minimum tax on certain high-income individuals – were included in the Biden-Harris Administration's previous budgets.  New tax proposals in the FY 2025 budget include measures to increase the recently enacted corporate alternative minimum tax rate from 15% to 21% and to deny business deductions for employee compensation above $1 million.

The Biden-Harris Administration continues to propose one of the highest corporate tax rates in the world, while many countries have recognized the benefits of reducing taxes and have reaped the rewards. To remain competitive in an increasingly globalized world, the US must adopt a more proactive approach to corporate taxation, focusing on lowering rates, simplifying the tax code, and creating incentives for businesses to invest domestically. By doing so, the United States can once again become a magnet for investment, innovation, and growth.

The United States has been criticized for maintaining a higher corporate tax rate, which may discourage businesses from setting up there. Additionally, US Democratic Party politicians are seen as focusing more on penalizing large corporations, rather than fostering a pro-business environment. The following points summarize the global trend of corporate tax reduction:

1. Global Tax Reductions: 39 countries, including developing nations, socialist economies, and former communist states, have reduced their corporate tax rates significantly over the past few years.
2. Examples of Tax Cuts: Countries like Belarus (24% to 18%), Brazil (34% to 25%), Canada (several reductions in the last decade), and the UK (21% now) have made cuts to stimulate investment.
3. Corporate Tax as a Competitive Tool: Nations like Singapore, Estonia, and the Czech Republic have adopted tax structures that encourage business formation and investment, even going so far as to offer special tax benefits for small businesses or offshore entities.
4. US Strategy Critique: US policies are viewed as more focused on preventing tax avoidance through reforms and shutting down international tax shelters, rather than incentivizing investment through tax rate reductions.
5. Impact on Businesses: The high US corporate tax rate is seen as a deterrent to businesses that could otherwise boost economic activity and government revenue. Meanwhile, countries with more favourable tax environments are reaping the benefits of foreign direct investment (FDI).

The Global Corporate Tax Race and the United States: A Critical Examination

Over the past few years, a global shift has taken place in how nations approach corporate taxation. The prevailing trend is toward lowering corporate tax rates to attract foreign investment, stimulate local economies, and encourage the establishment of new businesses. Many countries, including some that one might not associate with capitalist policies, have recognized the potential economic benefits of this strategy. Meanwhile, the United States, despite its position as a global economic leader, continues to maintain a relatively high corporate tax rate. This has raised questions about whether the US is falling behind in the race to create a more attractive business environment.

The Global Trend: A Strategy of Tax Reduction

Countries around the world, including nations with vastly different political and economic systems, have been slashing their corporate tax rates. From former Soviet states like Belarus, which reduced its rate from 24% to 18%, to emerging market economies like Brazil, which cut its corporate tax rate from 34% to 25%, the goal is clear: attract investment by lowering the tax burden on businesses. Other examples include:

• Canada: Despite a slight increase this year, Canada has reduced its corporate tax rate five times in the last decade to make the country more business-friendly.
• United Kingdom: After five cuts in the past decade, the corporate tax rate now stands at a competitive 21%.
• Singapore: This financial hub has reduced its tax rate to 17%, with small businesses able to pay far less through exemptions.

Countries in Europe, Asia, Africa, and South America have all embraced this model of competitive tax reduction. Even nations with reputations for being socialist or politically unstable—such as Denmark, Sweden, and Yemen—have made significant cuts to corporate tax rates to attract investment. The common theme among these countries is the recognition that lower taxes can stimulate both domestic and foreign business activity, ultimately leading to greater economic growth.

The Impact on the US Economy

The high US corporate tax rate creates several challenges:

1. Capital Flight: Higher taxes incentivize companies to move operations abroad to jurisdictions with lower tax rates. Countries like Ireland, Singapore, and Switzerland have become popular destinations for US businesses seeking to reduce their tax liability.
2. Reduced Business Formation: The high cost of doing business in the United States discourages new businesses from setting up shop. Startups, in particular, may find it more attractive to establish themselves in countries with lower corporate tax rates.
3. Lost Investment Opportunities: As global investors look for the best return on investment, countries with lower corporate tax rates are more likely to attract FDI. This means that the US may miss out on billions of dollars in potential investment, which could stimulate economic growth and create jobs.
4. Public Perception: The political focus on vilifying large corporations has created a public discourse that frames “big business” as the enemy. This narrative distracts from the real issue: how to create a tax environment that promotes growth and innovation.

US Tax Reforms: A Step Forward Under the Trump Administration

In 2017, the Tax Cuts and Jobs Act (TCJA) under the Trump administration aimed to address some of the competitiveness concerns surrounding the US corporate tax environment. One of its major provisions was the reduction of the federal corporate tax rate from 35%—which had been among the highest in the world—to 21%. This change was a major shift toward aligning the US with global tax trends.

Key aspects of the TCJA included:

1. Corporate Tax Rate Cut: The drop from 35% to 21% put the US more in line with international competitors, encouraging businesses to invest more domestically.
2. Simplification of the Tax Code: The TCJA simplified parts of the US tax code, including reducing the number of tax brackets and eliminating certain loopholes. This made tax compliance easier for many corporations, particularly smaller businesses, and aimed to reduce tax avoidance strategies.
3. Territorial Tax System: The TCJA also introduced a form of territorial taxation, where US companies would only be taxed on profits earned within the US, rather than taxing global profits. This was a significant shift that reduced the disincentive for US companies to repatriate earnings from overseas.
4. Temporary Tax Incentives for Capital Investment: The Act included provisions for businesses to immediately deduct the cost of certain capital investments, which boosted corporate spending on infrastructure, equipment, and research.

The Need for Further Reforms

While the Tax Cuts and Jobs Act was a major step forward, challenges remain. Many businesses still face a higher overall tax burden due to state and local taxes, and certain complexities remain in the tax code. Additionally, although the TCJA offered short-term incentives for investment, the longer-term implications—particularly around temporary provisions—mean that further reforms may be necessary to maintain competitiveness.

Proposed Solutions

To remain competitive, the US should consider additional reforms that build on the foundation laid by the Tax Cuts and Jobs Act:

1. Further, Reduce the Corporate Tax Rate: Although the reduction to 21% brought the US in line with some competitors, further reductions to 15%-18% would help the US keep pace with countries aggressively lowering their rates to attract business.
2. Permanent Capital Investment Incentives: Making provisions for capital investment permanent would help businesses plan for long-term growth, instead of relying on temporary incentives.
3. Enhanced Simplification: While the TCJA simplified certain aspects of the tax code, further efforts to streamline corporate taxes and reduce compliance costs could boost economic growth, especially for small and medium-sized enterprises (SMEs).
4. Additional Regional Economic Incentives: The US could also explore regional economic zones with reduced taxes, modelled after successful special economic zones in countries like China and India. These zones would attract investment into underdeveloped regions, helping to balance national growth.

Conclusion

The global corporate tax race has shown that lowering taxes is an effective way to stimulate business activity and attract investment. The Trump administration’s Tax Cuts and Jobs Act was a major step forward, simplifying the tax code, lowering corporate taxes, and modernizing the system to be more competitive.

However, more can still be done to position the US as a leader in attracting global business investment. Further reductions in the corporate tax rate, permanent investment incentives, and simplifying tax structures would help ensure that the US continues to be a beacon for innovation and economic growth.

Containing Iran: Calls for Immediate Action Beyond Biden's and Harris's Failed Appeasement

Iran stands on the verge of nuclear weapons development, yet the international community's response to Tehran’s aggression has been one of repeated appeasement — a strategy that has clearly failed. Now is the time for a bold, decisive approach to confront the regime's nuclear ambitions, terrorism, and destabilization of the region. The world can no longer afford to rely on diplomacy alone; a comprehensive strategy of sanctions and force is urgently required to protect global security.

1. The Failure of Appeasement: Diplomacy Has Run Its Course

For decades, the international community, led by the United States and Europe, has pursued diplomacy as the primary means of containing Iran's nuclear ambitions and aggressive behaviour. Negotiations, such as the 2015 Joint Comprehensive Plan of Action (JCPOA), aimed to slow down Iran’s nuclear enrichment and bring it into compliance with international norms. But appeasement has had the opposite effect — emboldening Iran to expand its nuclear program, enhance its missile capabilities, and extend its influence through proxy warfare.

Instead of deterring aggression, diplomatic overtures without credible threats of consequences have allowed Iran to test the limits of international patience. This gradual easing of red lines — reminiscent of the proverbial frog in boiling water — has only led to more egregious violations. The 2015 nuclear deal, while a diplomatic success on paper, ultimately allowed Iran to continue uranium enrichment and left key issues like ballistic missile development untouched. Since then, Iran has resumed enriching uranium at dangerous levels, expelled International Atomic Energy Agency (IAEA) monitors, and continued to support terrorism across the region.

2. Appeasement's Legacy: A More Dangerous Iran

The most glaring consequence of the failed appeasement strategy is Iran’s near-breakout nuclear status. Despite promises of transparency, Iran has enriched uranium to 60%, alarmingly close to weapons-grade levels. Meanwhile, Tehran has advanced its ballistic missile technology, creating delivery systems capable of striking far beyond the Middle East, threatening Europe and even the United States.

Iran’s defiance is not limited to its nuclear program. The regime continues to fund and arm proxies like Hezbollah, Hamas, and the Houthis, spreading instability across the region. The massacre by Hamas on October 7, Iran’s increasing attacks on US forces, and its violation of international maritime law highlight how appeasement has failed to temper Tehran’s aggression.

The international community has watched as Tehran built the largest ballistic missile arsenal in the region, systematically violated human rights, and expanded its proxy influence throughout the Middle East — all while facing minimal consequences. This track record proves that engagement without the backing of hard power has only emboldened the regime.

3. The True Cost of Appeasement: Regional and Global Instability

By repeatedly extending diplomatic olive branches, the West has allowed Iran to manipulate the international system. Tehran has become adept at using negotiations as a stalling tactic, continuing its nuclear advancements and aggressive foreign policy while keeping diplomatic channels open just enough to avoid decisive action.

Worse still, the world has normalized Iran’s escalations. What was once considered an intolerable violation, such as uranium enrichment beyond acceptable levels, is now a mere talking point in ongoing negotiations. This gradual erosion of standards has enabled Iran to push the boundaries of international tolerance, all the while inching closer to becoming a nuclear-armed state.

In addition, Iran's destabilizing actions have broader implications beyond the Middle East. Iran’s alliance with Russia in the Ukraine war, its support for terrorism, and its repeated targeting of international figures illustrate that Tehran’s ambitions reach far beyond its own borders. This is not just a regional issue but a global one.

4. A New Strategy: Moving Beyond Appeasement

The strategy of appeasement has run its course and must be replaced with a firmer approach. The US and its allies can no longer afford to treat Iran as a partner for peace. A clear and robust message must be sent that Iranian aggression will no longer be tolerated, and there will be immediate and significant consequences for further escalation.

A global coalition, led by the United States, must pivot from ineffective diplomacy to a strategy that combines both economic sanctions and military deterrence. The international community should trigger the “snapback” sanctions mechanism within the JCPOA framework and impose further economic pressure to weaken Iran’s regime. At the same time, a credible military threat against Iran’s nuclear facilities must be communicated — Iran must understand that its nuclear ambitions will be met with decisive force if it continues its pursuit.

5. Restoring Deterrence: The Role of Force

To prevent Iran from achieving nuclear weapons capability, the US and its allies must demonstrate that they are willing to take military action if necessary. The failure of appeasement has left no other option. The Biden administration should be applauded for quickly deploying military assets to the Middle East, but this must be followed up with clear ultimatums to Tehran. Iran must be made to understand that any further attacks on Israel, US personnel, or other allies will result in direct military consequences.

6. The Path Forward: A Unified Global Response

It is time for the international community to recognize the full scope of the threat posed by Iran. This regime’s actions are not just about regional dominance; they aim to challenge the entire Western security order. Iran's growing alliance with Russia, coupled with its proxy network in the Middle East, shows a concerted effort to disrupt global stability.

To confront this, the US, G-7 nations, European Union, and Arab allies must form a united front. Sanctions should be reimposed immediately, targeting critical sectors of Iran’s economy, including energy and banking. A multinational naval force should be deployed to safeguard international maritime routes, and strict measures should be enacted to cut off Iran's ability to arm and fund its proxies.

Moreover, Iran must face the prospect of direct military intervention if it continues to pursue nuclear weapons. Tehran must be forced back to the negotiating table, but this time with a clear understanding that diplomatic solutions will only be possible if accompanied by firm consequences.

7. Conclusion: No More Appeasement

The failure of appeasement has led to a more aggressive, dangerous, and emboldened Iran. The international community must now move beyond ineffective diplomacy and pursue a new strategy that combines crippling sanctions and the credible threat of military force. Only through such a decisive and unified response can Iran's nuclear ambitions be curtailed, its regional destabilization contained, and global security restored.

The time for appeasement has ended. It is time to act. START!

Masked Protesters: A Threat to Democracy and Public Safety

The presence of masked protesters during demonstrations, across North America, must be unequivocally outlawed. Such actions must be labelled as attempts to undermine democracy, carried out by shirkers, idlers, and potential domestic terrorists under the Criminal Code. The anonymity provided by masks emboldens individuals to engage in destructive behaviours without accountability, threatening public safety, civil society and the rule of law.

One alarming example is the growing trend of masked gangs, often affiliated with student unions, storming university campuses and violently disrupting classes. This not only constitutes an attack on students’ rights to education but is also a criminal act of violence against individuals and property. Such behaviour is unlawful and unacceptable in any country or any democratic society.

The Rising Tide of Lawlessness across the USA and in Canada

In Toronto, Montreal, as well as in other parts of Canada, there has been a concerning rise in acts of lawlessness perpetrated by masked individuals—many of whom are delinquent juveniles or socially harmful elements within student union membership. This trend has been escalating at an alarming rate, with little intervention from politicians, law enforcement, or the courts. These masked protesters, often students or so-called "professional" activists, engage in activities that blur the line between protest and domestic terror.

The inaction of politicians and the judiciary has allowed these increasingly dangerous acts to go unchecked, endangering public safety and societal order. The courts, law enforcement agencies, and government officials must recognize these activities for what they truly represent: deliberate attempts to intimidate and coerce through violence in pursuit of political or social objectives. Such behaviour is nothing short of domestic terror.

No Room for Mischaracterization or Leniency

Unfortunately, today’s mainstream media—most of whom have socialist leanings—often mischaracterize these acts of violence as harmless pranks, hoaxes, or amusing displays of youthful defiance. Such trivialization undermines the seriousness of the situation and fails to acknowledge the true impact on society. Labelling masked protests as harmless fun excuses the dangerous anti-social behaviour of those involved, allowing them to evade responsibility for the harm they cause. In these instances, the media must be held accountable as well.

What the public must recognize is that this is not simply youthful rebellion or mischief; it is a calculated strategy to use fear and violence to force political or social change. By disrupting educational institutions, harassing students and faculty, and destroying property, these masked agitators demonstrate their contempt for democracy, order, and the rights of others.

Labelling Masked Violence for What It Is: Domestic Terror

The actions of these masked individuals, whether they are professional protesters, hooligans, or extremists within the student body, must be labelled for what they are: acts of domestic terror. These individuals use intimidation, violence, and property destruction to impose their will on the student body, the government, and the broader public, seeking to further political or social objectives. Such activities meet the very definition of terrorism under the USA; Canadian laws and international norms, as they aim to influence policy and society through violence and coercion.

These masked perpetrators are not merely disruptive forces within student unions. They are habitual offenders whose actions threaten the very fabric of democracy and social stability. They should be recognized and treated as social outlaws—shirkers and idlers who undermine the democratic values that Canada and the USA hold dear. The leniency with which they have been treated by political leaders and judges must come to an end. It is time to hold these individuals accountable under the full weight of the law.

A Call to Action: Protecting Democracy and Public Safety

Canada’s and US politicians, law enforcement agencies, and the judicial system must act swiftly and decisively to address this growing threat. Masked protests and violent disruptions of public order should be met with stringent legal consequences. No longer should these acts be trivialized or brushed aside as youthful mischief. Instead, they must be recognized for what they are: calculated attempts to destabilize democracy and coerce the public through violence.

The time has come to restore law and order and safeguard the values of democracy. Those who seek to destroy these values, whether through masked protests or acts of intimidation, must be held accountable. 

The US and Canada’s future depends on the strength of its institutions and the unwavering commitment to the rule of law.