A – Potentially Positive – Welfare Assessment of the Global Minimum Tax

We assess the welfare implications of the Global Minimum Tax (GMT) in a macroeconomic model. All countries, including the US and a tax haven, implement a 15 percent GMT. This increases tax revenues, reduces profit shifting, and raises firms’ capital costs. In scenario one, the additional revenues are redistributed to households, yielding mixed results across countries, while the global welfare impact is slightly positive. In scenario two, the additional revenues are returned to firms as lower corporate tax rates, enhancing welfare for most countries and modestly increasing global welfare. We find these results are robust to US non-participation. JEL codes : D58, D60, H21, H25