WASHINGTON – Treasury Secretary Janet Yellen on Monday called for a minimum global corporate tax rate, seeking international cooperation that is crucial to funding the administration’s $ 2.3 trillion infrastructure proposal.
President Biden’s proposal to raise the corporate tax rate to 28% from 21% would push the US from the middle of the package among the big economies to the top. The Biden plan would also impose a minimum tax of 21% on the foreign revenues of US companies, eliminate an export incentive and increase taxes on the operations of foreign US companies.
If the US raises its tax rates and imposes greater burdens on the foreign profits of US companies, a global minimum tax would help prevent companies in other countries from having a potentially significant advantage. This coordination and the resulting tax revenue – not necessarily the goals of US companies – is on the administration’s priorities.
“Competitiveness is more than how U.S.-based companies face other companies in global mergers and acquisitions,” Ms. Yellen said Monday in a statement to the Chicago Council on Global Affairs. “It’s about ensuring that governments have stable tax systems that bring in enough revenue to invest in essential public goods and respond to crises, and that all citizens share the burden of government funding fairly.”
Ms. Yellen’s remarks came as finance ministers prepared to gather for the biannual meetings of the International Monetary Fund and the World Bank this week.