Yellen calls for a global minimum corporate tax rate in the first major speech as secretary of the Treasury

Yellen calls for a global minimum corporate tax rate in the first major speech as secretary of the Treasury

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“We are working with the G20 countries to agree on a global minimum corporate tax rate that can prevent the race to the bottom. Together, we can use the global minimum tax to ensure that the global economy thrives, based on a field. a more equitable playing field in the taxation of multinational corporations and spurs innovation, growth and prosperity, “said Yellen in a speech to the Chicago Global Affairs Council.

“Competitiveness is more than how companies based in the United States fare against other companies in global merger and acquisition proposals,” she said during the remarks, which represented her first major speech as Treasury secretary.

“It is about ensuring that governments have stable tax systems that generate enough revenue to invest in essential public goods and respond to crises, and that all citizens share fairly the burden of financing the government.”

President Joe Biden’s infrastructure proposal, called the American Employment Plan, would raise the minimum tax on US corporations to 21% and calculate it country by country to prevent companies from protecting profits in international tax havens.

The plan would also increase the corporate income tax rate to 28%, from 21%. The rate had reached 35% before former President Donald Trump and Congressional Republicans cut taxes in 2017.

Yellen had previously asked for a global minimum corporate tax rate, including during her confirmation process earlier this year, when she told a Senate panel that, if confirmed, she would work “with our allies in a global tax regime that protects the American competitiveness while guaranteeing corporations to pay their fair share. ”
The matter has been discussed in recent years by members of the Organization for Economic Cooperation and Development, including in 2019, when some finance ministers discussed a potential plan that, among other things, would ensure that multinational companies pay a minimum level of taxes, therefore discouraging them from transferring profits to countries with lower levels of taxation. The plan, however, never came to fruition.

This story has been updated.

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