A Most Dangerous Woman

If you support that Americans and American Corporations do not pay enough taxes, that bigger government is the answer, that the global economy is more important than a sovereign United States economy, that leveling the global playing field is a worthy goal, that the 4^th Amendment of the U.S. Constitution doesn’t apply to bank and financial records, that  ‘tax the rich’ is principled, that increasing domestic taxes on American corporations would not affect their international competitiveness, that Biden’s multi-trillion spending plans on leftist wish-lists are trustworthy, then you will love the new Secretary of the Treasury, Janet Yellen.  

Secretary Yellen chaired the White House Council of Economic Advisors under former President Bill Clinton and Chaired the Federal Reserve Board under former President Barak Obama. She is a big-government Keynesian economist who believes economic markets need government intervention. Milton Friedman, free-market Nobel Prize recipient, would not agree. 

Secretary of the Treasury is a powerful Cabinet Post. It controls financial and monetary matters of the federal government. She is the Chief Financial Officer and formulates domestic and international financial, economic, and tax policy. She forms fiscal policies for the economy, and managing government debt. She manufactures coins and currency. Her power and influence are international. Duties include U.S. Governor of the International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, and the European Bank for Reconstruction and Development, and a statutory member of the U.S. National Security Council.  

Yellen requisitioned Congressman Richard Neal (D-Ma.), Ways and Means Committee Chair, to include provisions in the Reconciliation Package which require banks and financial institutions to report incoming and outgoing amounts of $600 in accounts of citizens. She claims that collecting such information is routine, rather than an unprecedented invasion of privacy, and a violation of the 4^th Amendment. *  

Such whopping breach of privacy has never been seen in our country. Americans would have bank accounts opened to fishing expeditions by federal investigators when they buy a car or a television. The Senate Banking Committee questioned Yellen about this revolutionary proposal. She claimed it necessary to close the “tax gap.” Conservative lawmakers and the American Bankers Association vigorously oppose such a law. 

A wealth tax was discussed when CNN’s Jake Trapper interviewed Yellen. She agreed with Finance Committee Chair Senator Wyden (D-Or.) about a desire to establish a wealth tax to pay for Biden’s $3.5 trillion social spending bill.  

Plans for an unrealized capital gains tax from liquid assets (stocks and bonds) were revealed by Yellen as part of the $2 trillion Reconciliation Bill. This would enable the government to get capital gains which now are not taxed until they are realized (sold). You buy stock at $10. It goes up in value to $100. You have not sold it. However, you would owe a capital gain tax on the $90 appreciation. This increased taxation would be done on an annual “mark to the market” mechanism.   

Senators Elizabeth Warren (D. Ma), Angus King (I. Me), Ron Wyden (D-Or.) introduced a plan to enact a 15% minimum corporate tax on income of large corporations; to help fund the “Build Back Better” Bill.  Yellen’s Treasury Department would be tasked with determining which corporations would be subject to the tax. 

The Organisation for Economic Co-operation and Development (OECD) is a French intergovernmental global economic organization with 38 members, including the United States. It was founded in 1961 as a forum committed to democracy and a market economy. Evolving from its original intent, the OECD publishes a tax model to allocate and interpret taxation provisions and rights between countries in the global economy.  

Reforming the international tax system is a Yellen priority. She advocates a global minimum tax, as “…it would help the global economy thrive by leveling the playing field for businesses, and encourage countries to compete on a positive basis.” International tax reform was finalized by OECD in August, and signed by 136 countries. The current goal is to subject multinational enterprises to a minimum 15% tax rate starting in 2023. This new system is away from traditional economic doctrine, to interconnected global systems. Biden and Yellen are keen for this. Additionally, they propose to raise the U.S. corporate tax rate to 28%. 

There are two parts to the proposed OECD tax reform. Part one determines allocation of profit; and part two seeks a global minimum corporate tax rate. Allowing OECD to determine tax rates for American corporations is the camel’s nose under the tent for future bites on American national sovereignty. It goes beyond growth, to societal goals, environmental sustainability, reshaping global commerce, and reducing inequality. It is a slide toward a one-world strategy. Yellen warns “Allowing countries to determine their own corporate tax rates is ‘A Race to the Bottom.’” 

OECD’s goal is for tax revenue to be distributed more evenly across countries. It would grant countries rights over corporate profits where the consumers live rather than the home country of the corporation. An American corporation with customers in China would owe tax to the government of China. 

President Trump pushed back strongly against OECD’S tax measures. President Biden likes them. Any agreement (treaty) reached by Yellen and Biden with OECD must be ratified by the Senate to be binding international law. Otherwise, it is merely an agreement from which a future president could withdraw. President Trump withdrew from the Paris Accords and the Iran Deal. President Biden used an Executive Order to be re-admitted to the Paris Accords and has stated that the United States will re-join the Iran Deal.  

Executive agreements, rather than treaties, put the United States on an uncertain footing in the world. It is not known whether President Biden will seek Senate ratification, which (if passed) would make it binding international law; or sign onto an agreement which can be retracted by a future president.  

These are perilous times for personal liberties and for national sovereignty.  Lady Justice is blindfolded, but Secretary Janet Yellen’s elbow is on the scale.