> This becomes a minimum wage for nations
Why is that a problem?
> removes the incentive to compete to be the home of corporate headquarters
No, it shifts the means of incentives. It's no longer a race to the bottom tax rate.
As I understand it, the problem with a border adjustment tax is implementation overhead; it would be expensive to audit. Noting that the IRS in the U.S. is not funded enough to investigate tax fraud as it is, this seems to be a major problem. You would also likely need foreign cooperation. There's no reason to believe a corporation headquartered in the U.S. needs to be truthful about their foreign revenue, and how would you know if they were without a foreign government's assistance.
The problem with implementing a world-wide minimum tax rate is organization, getting all countries to agree and stand by it. This is something the world has been engaged in doing for around 100 years now. We've had failures (League of Nations) and successes. There's no guarantee of success, but importantly, tax havens can be isolated if 130+ countries agree to do so, until they follow suit.
Basically, even if global minimum tax is not the optimal solution (which remains to be shown), it's better to have a sub-optimal solution that can be implemented than an optimal solution that's impossible.
Why is that a problem?
> removes the incentive to compete to be the home of corporate headquarters
No, it shifts the means of incentives. It's no longer a race to the bottom tax rate.
As I understand it, the problem with a border adjustment tax is implementation overhead; it would be expensive to audit. Noting that the IRS in the U.S. is not funded enough to investigate tax fraud as it is, this seems to be a major problem. You would also likely need foreign cooperation. There's no reason to believe a corporation headquartered in the U.S. needs to be truthful about their foreign revenue, and how would you know if they were without a foreign government's assistance.
The problem with implementing a world-wide minimum tax rate is organization, getting all countries to agree and stand by it. This is something the world has been engaged in doing for around 100 years now. We've had failures (League of Nations) and successes. There's no guarantee of success, but importantly, tax havens can be isolated if 130+ countries agree to do so, until they follow suit.
Basically, even if global minimum tax is not the optimal solution (which remains to be shown), it's better to have a sub-optimal solution that can be implemented than an optimal solution that's impossible.