Yellen touts payoff from Biden's stimulus plan
Treasury Secretary Janet Yellen will argue Monday for a global corporate minimum tax rate as she pushes President Joe Biden’s plans to raise levies on U.S. companies, a person familiar with her remarks said.
Yellen’s comments, reported earlier by Axios, are part of an effort to prevent companies from seeking locations with lower taxes as the administration seeks higher levies on American firms to help pay for a US$2.25 trillion infrastructure program.
“Competitiveness is about more than how U.S.-headquartered companies fare against other companies in global merger-and-acquisition bids,” Yellen will say in a speech to the Chicago Council on Global Affairs. “It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government.”
Yellen will say the U.S. is working with G-20 nations to find an appropriate minimum “that can stop the race to the bottom.” The U.S. is involved in talks led by the Organization for Economic Cooperation and Development with about 140 countries to develop a global agreement on minimum levies, but participants haven’t yet reached a deal.
Biden’s plan, unveiled last week, includes raising the corporate income tax rate to 28 per cent from 21 per cent. It was lowered from 35 per cent under President Donald Trump. The Biden administration is also seeking a 21 per cent global minimum tax, which would be an increase from the roughly 13 per cent that corporations currently owe on offshore earnings.
“Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth, and prosperity,” Yellen will say.