On Monday, US Treasury Secretary Janet Yellen demanded a minimum tax rate for multinational corporations. It can be used all over the world. The call comes after the Biden administration raised corporate taxes in the United States.
Speaking at the Chicago Council Global Affairs Think Tank on Monday, Yellen expressed his desire for a minimum tax rate for multinational corporations, regardless of their headquarters. According to him, such a move would put an end to the financial ‘racing bottom’ by allowing various countries to keep their corporate taxes as low as possible.
Yellen’s appeal comes a week after President Joe Biden released it Announced a $ 2,000 billion investment plan, To revive the post-Govt economy. It is partly funded by corporate tax increases. His predecessor, President Trump, raised the corporate tax rate in the United States from 35 percent to 21 percent. Biden wants to raise that rate back to 28 percent, and wants U.S. companies to raise taxes on their foreign profits to 21 percent.
In addition to raising the tax rate, the Biden management wants to close the loopholes of any major US companies Looking for the most favorable tax rules abroad. He is also considering new tax incentives for companies to invest in research and production in the United States. But negotiations in Congress promise to be complicated, and the plan has not met unanimously.
The main fear of those who oppose the investment plan is that companies will leave the United States. If it succeeds in introducing a global minimum tax rate, the Biden administration will mop up that bad effect somewhat. However, the president firmly believes that the U.S. corporate tax rate of 28 percent is “fair to all” even without the global minimum rate.
President Biden’s plans announced last week demonstrate international courage, including raising the U.S. minimum tax rate, and renewed international commitment, recognizing the importance of working with other countries to end the pressures of tax competition and the erosion of the corporate tax base. , Explains the Minister of Finance. “Over the last four years, we have seen what happens when the United States leaves the world stage. America first Never refer to the United States alone. ‘
On the G20’s agenda
Janet Yellen said the minimum global tax rate would be discussed at the G20 meeting next Wednesday. The organization hopes to reach an agreement against the meeting of finance ministers and central bankers of member countries on July 9 and 10. If an agreement is made between the 20 richest powers in the world, it is an example of global application. But, it will take a lot more impetus to connect the rest of the world.
“We can make the world economy prosperous by creating more and more sports in the taxation of multinational corporations,” he added.