Treasury Secretary Yellen Calls for Global Company Tax Rate Minimum
Since the Biden government kicks off its push to increase the corporate tax rate in a bid to cover President Joe Biden’s proposed infrastructure program, Treasury Secretary Janet Yellen is predicting for nations worldwide to enact a global minimum to prevent businesses from fleeing overseas to find lower tax rates.In a speech to the Chicago Council on Global Affairs, her first important address since her historic confirmation to lead the Treasury, Yellen said the U.S. is working with G-20 nations to”prevent the race to the base” — countries attempting to lower tax rates in an attempt to draw companies and company.
“Competitiveness is about more than just how U.S.-headquartered businesses fare against other firms in global merger and acquisition requirements,” she said. “It is all about making certain governments have stable tax systems that raise adequate earnings to invest in essential public goods and respond to crises, which all taxpayers fairly share the burden of financing government.”
According to the Tax Foundation, the average tax rate worldwide was 24 percent in 2020. Among G-20 nations, the average rate was almost 27 percent. Former President Donald Trump lowered the rate to 21% from 35 percent in 2017, carrying the U.S. from the highest one of the 37 countries in the Organization for Economic Cooperation and Development to the 13th-highest.
President Biden would like to raise the rate to 28 percent in his proposed tax program.
“Over the last four decades, we have seen firsthand what happens if America steps back from the worldwide phase,” Yellen said. “America first must never mean America alone.
“President Biden’s proposals announced last week call for bold national action, like to increase the U.S. minimum tax fee, and renewed international involvement, recognizing it is very important to work with other countries to stop the pressures of tax competition and corporate tax base erosion,” she mentioned.
“Together,” Yellen said,”We could utilize a global minimum tax to be certain that the worldwide economy thrives based on a more level playing field at the taxation of transnational businesses, and spurs innovation, growth and wealth.”
Yellen also said that the United States will step up its efforts at home and overseas to fight climate change,”later sitting on the sidelines for four decades.”
That strategy has raised the ire of GOP members of Congress, who say it threatens the ability of the U.S. petroleum and gas industry to access needed financing.
The Associated Press contributed to the report.