Adewale Adeyemo, Deputy Treasury Secretary Janet Yellen, said Wednesday that raising the U.S. corporate tax rate to 28 percent will not make U.S. companies less competitive, as the Biden administration is confident it can win the support of developed countries to set a minimum tax on worldwide.
“We have worked very closely with our international counterparts to counter what has been a race to the bottom when it comes to international taxation,” Adeyemo, who works alongside Wally, told CNBC’s Sara Eisen.
“We believe in both of the things we will do globally in the G-20, where the United States has made it clear that we are back and looking forward to leading the world, we are able to reach an agreement that will draw in the vast majority of developed countries in the world set a minimum tax, “said Treasury official No. 2.
Yellen said Monday that he is working with the Group of 20 nations to create a minimum income tax that will prevent companies from moving abroad to find lower rates. President Joe Biden has made raising the U.S. corporate tax rate a central mechanism for financing his massive $ 2 trillion infrastructure plan.
The Republican Party is also widely opposed to the 2017 tax cuts of former President Donald Trump, which reduced the rate paid by businesses for earnings from 35% to 21%. Biden’s plan will not only partially reverse the corporate tax cut, but will also provide for other key provisions of Trump’s tax cuts and jobs law.
The president opened the door to compromise on the proposed profit tax increase on Wednesday, but said the US must act boldly on infrastructure if it wants to keep up with nations like China.
Adeyemo defended the Biden administration’s broad infrastructure plan and said the US needed investment beyond road and bridge repairs to compete globally in the modern era.
“The investments that the president is asking for in the job package are the same investments that the Chinese and other countries are making,” Adeyemo said. “It’s important to do them now to make sure America can compete in the 21st century.”
He said Biden’s plan and broader definition of White House infrastructure are favored not only by progressive politicians but also by Wall Street executives.
Asked to respond to criticism that the “once in a generation” plan is both too big and not focused enough, Adeyemo pushed back.
“The pandemic has taught us that we can’t just think about traditional infrastructure, which is roads, bridges and ports, but we need to think about what it takes to compete in the 21st century, which includes things like broadband.” Adeyemo said.
“One of the groups that was hit hardest by Covid-19 was the ones that had to take care of others because they could not enter the labor market,” he added. “A number of the investments we are making here are about making sure that those individuals have support and infrastructure around them to ensure that they can return to the workforce and contribute to the economy.”
Adeyemo’s comments came a week after Biden debuted in Pittsburgh for the first time with his much-promised infrastructure proposal.
The US jobs plan, if adopted, would invest hundreds of billions of dollars in transportation infrastructure, water systems, broadband access, power grids, training and other provisions. It requires $ 400 billion to care for the elderly and people with disabilities, as well as $ 300 billion to build and modernize affordable housing.
Republicans are virtually united in opposition to the plan as written, believing the legislation is far too extensive in light of the $ 1.9 trillion Covid-19 aid package that Democrats navigated through Congress earlier this year. .
Both Yellen and Adeyemo made history in the Treasury Department as the first woman to lead the agency and the first black deputy secretary, respectively.