The World Today for June 21, 2021
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NEED TO KNOW
A Taxing Issue
At their recent meeting in Britain, leaders of the Group of Seven industrialized nations accepted an American proposal to impose a minimum global corporate tax. The new levy would “address the tax challenges arising from globalization and the digitalization of the economy,” wrote the Hill, citing a press statement.
American Treasury Secretary Janet Yellen tweeted that a minimum tax of 15 percent would make it harder for multinational corporations to escape payment by shifting profits to tax havens around the world. “That global minimum tax would end the race-to-the-bottom in corporate taxation,” she wrote, according to Voice of America.
Citing University of California at Berkeley and University of Copenhagen analysts, the Washington Post editorial board in a positive assessment of the global minimum tax proposal noted how companies moved $700 billion of profits to tax havens in 2017. The analysts estimated that governments would have collected $105 billion on those revenues if the taxman could have reached them.
Organization for Economic Co-operation and Development Center for Tax Policy Director Pascal Saint-Amans estimated that the global minimum tax would generate $150 billion in public revenues that could help pay for schools, infrastructure and other needs in countries where these companies conduct business, reported Bloomberg.
At a press conference that Reuters covered, German Finance Minister Olaf Scholz said the new tax regime would amount to a “revolution.”
The world is a long way from realizing that windfall, however.
Investment bank Goldman Sachs is playing down the proposal, saying it won’t affect how multinationals operate much and faces significant hurdles that might stop it from ever taking effect, CNN wrote.
Members of the Group of 20 largest economies in the world, particularly China and India, must approve the proposal for it to work. And China will likely seek exemptions from the rule. It has reduced taxes below 15 percent for key industries that produce advanced technologies that leaders in Beijing consider essential to the country’s growth and development.
Another challenge will be convincing Ireland, also a member of the G20, to give the ok. The Emerald Isle’s tax rate of 12.5 percent has made it a favorite tax haven for big companies. Irish leaders told Sky News they would not raise their taxes to conform with the proposal.
Switzerland is similarly considering subsidies to some industries to help offset higher taxes, added the Financial Times.
American companies and the American officials who support them have also been happy with the old tax regime that has allowed them to bypass the Internal Revenue Service, the New York Times added.
The global tax might be an idea whose time has come. But many will kick and scream before they accept it.
WANT TO KNOW
Friends in High Places
Hardliner Ebrahim Raisi won Iran’s presidential elections Saturday, a victory that will pave the way for the country’s leadership to cement the conservative legacy of Iran’s Supreme Leader Ayatollah Ali Khamenei, the New York Times reported.
The judiciary chief received nearly 18 million of 28.9 million votes in an election that lacked any major moderate candidate – many were disqualified by Iran’s Guardian Council, which vets all candidates.
Turnout was 48.8 percent, marking a significant decline from the last presidential election in 2017 which saw the reelection of moderate President Hassan Rouhani.
Raisi was favored by Khamenei as a successor and the election will allow the supreme leader to have a president who won’t challenge him.
The hardline leader has a record of human rights abuses, including allegations of involvement in the mass execution of political opponents in 1988. He is currently under United States sanctions.
Even so, analysts said that his background will not hinder the renewed negotiations between the United States and Iran to salvage the 2015 nuclear deal in exchange for lifting American economic sanctions.
They added that Khamenei’s support will allow Raisi to implement more changes than outgoing Rouhani: The latter ended up antagonizing the supreme leader and disappointing his moderate base for failing to lift economic sanctions following the US withdrawal from the nuclear deal.
However, observers noted that Raisi’s conservative view could make it difficult for the US to reach additional deals with Iran on the country’s missile program and the backing of proxy militias around the Middle East.
A Soft Rap on the Knuckles
The United Nations General Assembly adopted a resolution over the weekend condemning Myanmar’s military junta and calling on countries to halt the flow of weapons to the country but stopping short of calling for a global arms embargo, the Washington Post reported.
The resolution calls on Myanmar’s military leaders to release political detainees and respect the country’s democratic institutions following the Feb. 1 coup that ousted the democratically elected government of Aung San Suu Kyi.
The tiny European nation of Liechtenstein introduced the resolution, saying there was “real and present danger of a full-fledged civil war” in Myanmar.
The resolution was adopted after a vote of 119 in favor and 36 abstentions.
Myanmar’s representative to the UN, Kyaw Moe Tun, also voted in favor of the resolution: The diplomat is still recognized by the UN as Myanmar’s ambassador although he was pushed out and charged with treason for not siding with the military junta.
Tun welcomed the resolution but said that it was “watered-down.” He added that the army is using heavy artillery, mostly imported, to kill civilians.
The military junta, meanwhile, rejected the resolution as “based on one-sided sweeping allegations and false assumptions,” according to the Associated Press.
Although the resolution is non-binding, analysts said that it can serve as a politically significant indication of global disapproval.
Even so, the 15-member Security Council has more power than the General Assembly. China, a permanent member and one of the Myanmar military’s few international allies, can exercise veto power along with Russia. Both countries along with Belarus objected to the resolution.
Half a Million…and Counting
Thousands of people protested across Brazil against President Jair Bolsonaro’s handling of the coronavirus pandemic as the country’s death toll spiked above 500,000 over the weekend, the BBC reported.
Protesters held signs with slogans like “Bolsonaro must go” or simply “500,000” while denouncing the president for his lax and dismissive approach toward the pandemic.
The right-wing leader has repeatedly denied the severity of Covid-19, refused to implement a coordinated national response and expressed skepticism toward vaccines, lockdowns and mask-wearing requirements.
Bolsonaro maintains that the impact of the lockdown on the Brazilian economy would be worse than the virus and says that he has tried everything to buy vaccines from other countries.
About 15 percent of adults are fully vaccinated.
His opponents, however, accuse him of deliberately delaying vaccines for political reasons. The Brazilian Congress, meanwhile, is investigating the government’s handling of the pandemic.
The outbreak in Brazil has been fueled by more transmissible variants of the virus including the Gamma variant that was first identified in the Amazon region.
Brazil recorded an average of 70,000 cases and 2,000 deaths daily in the past week.
The health institute Fiocruz said the situation is “critical,” adding that the outbreak could worsen amid the slow speed of the country’s vaccination program and the start of winter.
Back To Business
The melting Arctic ice has alarmed climate scientists but it has also offered researchers the opportunity to study previously unknown organisms.
Case in point: Russian researchers found worm-like creatures that had been trapped in the Siberian permafrost for 24,000 years, Ireland’s Independent reported.
The ancient creatures turned out to be Bdelloid rotifers, microscopic organisms found across the world and known to be able to withstand extremely cold temperatures.
Normally, rotifers can survive up to 10 years frozen but the newly discovered organisms not only broke that record, but also got right back to feeding and reproducing asexually once they were fully thawed.
“Our report is the hardest proof as of today that multicellular animals could withstand tens of thousands of years in cryptobiosis, the state of almost completely arrested metabolism,” said Stas Malavin, a co-author of the study on the sleeping organisms.
He added that the rotifers’ ability to sleep thousands of years and then get back to business resembles the cryo-sleep technology seen in sci-fi tales.
“Of course, the more complex the organism, the trickier it is to preserve it alive frozen and, for mammals, it’s not currently possible,” he said.
The invertebrates are the latest ancient creatures to have emerged after millennia of being frozen.
In 2018, a Russian science team successfully revived a species of tiny worms they discovered suspended in an icy chunk of Siberian permafrost, according to Business Insider.
COVID-19 Global Update
More than 180 nations worldwide have confirmed cases of the coronavirus. The following have the highest numbers worldwide as of 4 a.m. ET*:
- US: 33,541,984 (+0.01%)
- India: 29,935,221 (+0.18%)
- Brazil: 17,927,928 (+0.25%)
- France: 5,819,088 (+0.03%)
- Turkey: 5,370,299 (+0.09%)
- Russia: 5,255,214 (+0.33%)
- UK: 4,646,068 (+0.20%)
- Argentina: 4,268,789 (+0.24%)
- Italy: 4,252,976 (+0.02%)
- Colombia: 3,945,166 (+0.71%)
*Numbers change over 24 hours