Lack of unity of large companies | economy

Business concentration around the world is unstoppable. Spencer Y. A work prepared by economists Kwon (Harvard University); Uren Ma, (University of Chicago) and Kasper Zimmerman (Libniz Institute for Financial Research SAFE) conclude that in the US, “corporate concentration has been steadily increasing over the past 100 years”. It notes that the top 1% of companies own 97% of all assets, compared to 72% a century ago.

Extreme commercial concentration has given enormous power to large corporations that have used…

Business concentration around the world is unstoppable. Spencer Y. A work prepared by economists Kwon (Harvard University); Uren Ma, (University of Chicago) and Kasper Zimmerman (Libniz Institute for Financial Research SAFE) conclude that in the US, “corporate concentration has been steadily increasing over the past 100 years”. It notes that the top 1% of companies own 97% of all assets, compared to 72% a century ago.

Extreme corporate concentration has given large corporations immense power, which they have used to drastically reduce their tax contributions. The EU’s Fiscal Observatory highlights that the corporate income tax rate has risen from 50% in 1985 to 21% in 2020. Official rates are reduced by multinationals locating their profits in tax havens instead of declaring where they operate.

Faced with this situation, in 2021, within the framework of the Organization for Economic Co-operation and Development (OECD), about 130 countries agreed to a corporate tax of at least 15%, and 100 large multinational companies must pay a portion of their profits from 2024. . It should be noted that the Independent Commission on Reform of International Corporate Taxation (ICRICT, its acronym in English) had demanded a minimum rate of 25%.

These days 138 OECD countries have reached a new agreement to specify measures for the application of 15%, but at the same time have postponed the veto on new digital taxes until 2025. The move has hit crisis-hit countries like Sri Lanka. , 5 million dollars.

The IMF’s action led to a letter sent to its president Kristalina Georgieva, ICRICT co-chairs Jayati Ghosh and Joseph E. Signed by Stieglitz and key members of the commission such as Thomas Piketty, Gabriel Zugman and Eva Jolie. The letter recalls that Sri Lanka, like Pakistan, Kenya and Nigeria, does not support the 2021 agreement and therefore considers it “unacceptable” to be forced to “give up its sovereign right to introduce fiscal policy”. More worryingly, ICRICT notes that “the current outcome of the OECD tax negotiations is unlikely to generate significant or sustainable revenue for developing countries”. The lack of tax revenue affects all countries like ours that have had to borrow money to mitigate recent crises. The disunity of big corporations threatens the social stability of millions of people.

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