WASHINGTON – Treasury Secretary Janet Yellen on Monday called for a global minimum tax rate on companies, with a view to international cooperation that is crucial to funding the administration’s $ 2.3 billion infrastructure proposal.
President Biden’s proposal to raise the corporate tax rate to 28% from 21% will push the US out of the middle of the group among the largest economies to near the top. The Biden plan would also levy a minimum tax of 21% on U.S. foreign revenue, remove an export incentive and increase taxes on some foreign companies’ U.S. operations.
If the U.S. raises its tax rates and imposes higher burdens on the foreign profits of U.S. companies, a global minimum tax could help prevent companies in other countries from having a significant potential advantage. Coordination and subsequent tax revenues – not necessarily the goals of American businesses – are high on government priorities.
“Competitiveness is about more than the way companies in the US headquarters compete against other companies in global mergers and acquisitions,” she said. Yellen said Monday in a statement to the Chicago Council on Global Affairs. “It is about making sure 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.”
Me. Yellen’s remarks came when finance ministers were prepared to meet virtually this week for meetings of the International Monetary Fund and the World Bank.