Minister of Finance Janet Yellen
Janet Louise Yellen The Hill’s Morning Report – Biden’s infrastructure plan leads to 2024 definition debate Hopeful GOP White House leads opposition to Biden cabinet COVID disrupted a Latino business boom – recovery must aim to restore it MORE on Monday pushed for a global minimum corporate tax rate during her first major speech in her new role, as the Biden government seeks to work out an infrastructure plan funded by raising taxes on businesses.
“Together we can use a global minimum tax to ensure that the global economy thrives on a more level playing field in the taxation of multinational corporations, and drive innovation, growth and prosperity,” said Yellen at a virtual event hosted by the Chicago Council on Global Affairs.
The speech comes at the start of the spring meetings of the World Bank and the International Monetary Fund, which are held virtually.
President Biden
Joe BidenBiden should look to ‘Ostpolitik’ to negotiate with autocrats The Hill’s Morning Report – Biden’s infrastructure plan sparks definition debate The Memo: Biden’s gamble on taxes MORE Last week proposed a series of corporate tax changes that, according to his administration, could raise more than $ 2 trillion in 15 years to pay for infrastructure investments. The plan would increase the U.S. corporate tax rate from 21 percent to 28 percent, raise a U.S. minimum tax on corporate foreign income to 21 percent, and take steps to prevent companies from relocating their headquarters and jobs abroad.
Critics of raising corporate taxes argue that this would make the US business environment less competitive compared to other countries that have lowered their corporate tax rates in recent years.
Yellen said the Biden administration wants to end a global “race-to-the-bottom” on corporate tax rates by working with other countries in the G20 for a global minimum tax rate agreement. She said this effort is important to ensure that countries can generate the revenue they need to provide the necessary public services.
“Competitiveness is about more than how US-headquartered companies stack up against other companies in global mergers and takeover bids,” said Yellen. “It’s about ensuring that governments have stable tax systems that generate sufficient revenue to invest in essential public goods and respond to crises, and that all citizens share the burden of government funding fairly.”
A treasury official said on Monday that the G20 has set a goal of reaching a political agreement on international tax issues by July and that the government is still working towards that goal. The official acknowledged that some countries will eventually fail to sign an agreement on a global minimum tax, but said a number of Biden’s tax proposals aim to prevent U.S. companies from moving their headquarters, assets and jobs to tax havens.