Is now the time to make global corporations pay their fair share?

As the procrastinators among us worryoverour owntax forms, it may be a little galling to think about the shrinking share of taxes paid bysome wealthy corporations.

This week the New Democratic Party is considering how to soak the rich to helppay for the less well off, but as the rich get richer and governments look for ways to pay for the pandemic, you don't have to go to the NDP to find experts trying squeeze a bit more money out ofthe wealthy.

U.S. money manager Warren Buffett, the world's fourth-richest person, has proposed a wealth tax. In the U.S., the state of New York is working on a plan to raise taxes on those earning more than a million dollars a year, joining New Jersey in an attempt to raise revenue from therichest.

And at this week'sgathering of the World Bank and the International Monetary Fund, world leaders, including U.S. Treasury Secretary Janet Yellen, are going after the biggest pots of money of all. They want toraise more cash from global corporations.

Yellen on Mondayurged the adoption of a minimum global corporate income tax to offset any issues stemming from U.S. President Joe Biden's plan to raisethe U.S. corporate tax rate to 28 per cent from 21 per cent.

Contribution from corporations slide

It's not a new idea. Back in 2014, a panel struck by the Organization for Economic Co-operation and Development thought they had it setwith a plan to reverse the slide in government revenues from the world's biggest companies. When I wrote about it at the time inFighting the corporate tax tricks that lead to inequality, OECDtax directorPascal Saint-Amanswas confidentchange was imminent, as a new agreement kicked in by2016.

The OECD was convinced it had global buy-in and that made it easy: "Because it's political," Saint-Amans said confidently in 2014."When you have political support you find the technical solutions."

But by 2016, with the election of Donald Trump asU.S. president, that political consensus had collapsed and corporate tax revenue continued to slide. According to the upcoming book The World After,co-edited by Canadian scholar Jennifer Welsh, that window for change may have opened again.

Canada has been a supporter of the OECD plan and a spokesperson for Finance Minister Chrystia Freelandsuggested Tuesday that Canada would supportthose proposing the minimum tax planat this week's meeting.

"At this moment where governments have already asked their populations to do things out of the ordinary in the name of public health, they've also had to extend that logic ... into their post-pandemic recovery," said Welsh, after Yellen's statement on global minimum corporate tax rates.

There are two main barriers to raising taxes on global corporations. One is ideological. Some people are convinced that the best way to run an economy is to leave money in the hands of the rich and the big companies because they will use that money to make us all wealthier.

Critics of that idea point to the fact that as taxes on companies and the people who own them have shrunk in rich countries, so has the share of wealth going to the poor andmiddle class. During the years corporate tax rates have been falling, the rich have gotten richer compared to everyone else.

Heading offshore

But the second barrier to raising taxes on big corporations is the same one faced by states like New York trying to tax their own wealthy people. The threat of higher taxes makes people move away to places where taxes are lower.

With a good tax accountant, you don't even have to move. All you have to do is make sure the beneficial owner, a legal corporation, officiallyresides inthat low tax regime. Ireland, for example, offers corporate tax rates as low as 12.5 per per cent for companies that do business there. In order to earn revenue, countries compete in a race for the bottom.

What Yellen has proposed and has garnered support for from countries like Germany and France and institutions like the IMFis to agree to binding laws that would set corporate taxes at a minimum rate. While official corporate tax rates have declined currentlyranging between about12 to 35 per centin major economiesthe plannedprovision would also crack down on various laws and deductions that make them even lower. In 2014, by claiming it was actually earning its money under Irish tax law, Apple paid a tax rate estimated at 0.0005per cent.

Some of those loopholes have been patched but Welsh says the current crisis may allow for wider reforms, shaming low-tax countries and the companies that benefit from them into doing their share. That doesn't mean low tax regimes will give up their lucrative advantages without a struggle. Nor will lobbyists for large corporations necessarily cave in.

Canadian tax historian Shirley Tillotsonand others told me last yearthat history has shown that times of crisisgivegovernments more latitude to raise taxes. They said in a rich country like Canada there were plenty of places to look for money, but once again political will and popular acceptance of change are crucial.

Welsh said The World After is a joint project between the University of Montreal and McGillUniversity to present a series of ideas to exploitwhat they saw as a "sense of great possibility" that comes at a moment of crisis.

Yellen's proposal scheduled to be discussed this week could be part of a generational shift that Welsh and people like Buffett have been hoping for. But Welshwarns that periods of crisis can also lead to a urge for stability, a demand for tinkering rather than radical reform.

"Not all crises lead to transformative change," said Welsh. "It takes leadership. It takes the ability to have credible proposals that are dramatic, but could actually work."

The plan for minimum corporate taxes may fit that bill.

Follow Don Pittis on Twitter @don_pittis