The 15% solution

The world is getting a crucial reminder of what it looks like when America tries to lead, marshaling the international community to solve problems through patient, grinding, strategic diplomacy, rather than succumbing to feelgood chest-pounding and petulance. Friday, capping a week in which the Pandora Papers exposed egregious worldwide tax evasion, the Organization for Economic Cooperation and Development announced a breakthrough agreement: 136 countries representing more than 90% of global GDP have signed onto tentative agreement backing a global minimum corporate tax rate of 15%.

To win over longtime holdouts like Ireland and Hungary, the agreement had to note that the rate will not be increased in future years, small businesses will be exempt, and implementation will be phased in, beginning as soon as 2023. The OECD estimates $150 billion in revenues that now evade collection will be captured.

It’s not only that the tax floor is set to be raised.

Under the deal, companies like Amazon and Facebook, which have a footprint all over the globe, will have to pay taxes wherever they operate, not only where they’re domiciled. Figuring out how to do that will no doubt be complicated, but the fact that almost every last developed nation on Earth is signing on is a promising step indeed.

About that “almost”: Kenya, Nigeria, Pakistan and Sri Lanka are still outliers, perhaps holding onto hope that tomorrow, they may become the new tax havens for companies eager to evade their obligations. They can cling to that ambition or get with the program, making a powerful statement that no place on the planet will let billions of dollars in revenue escape fair taxation to help fund the greater good.

Credit goes to Treasury Secretary Janet Yellen, Secretary of State Tony Blinken and the Biden administration. Set a fair floor on Earth — then hope that no canny CEO moves his headquarters to a P.O. Box on the moon or Mars anytime soon.