WASHINGTON – Treasury Secretary Janet Yellen on Monday defended a global minimum corporate tax rate, seeking international cooperation crucial to funding the administration’s $ 2.3 trillion infrastructure proposal .
President Biden’s proposal to raise the corporate tax rate from 28% to 28% would push the United States from the middle of the group among the major economies to the top. The Biden plan would also impose a minimum tax of 21% on the foreign income of U.S. companies, eliminate an export incentive, and increase taxes on U.S. operations of some foreign companies.
If the U.S. raises tax rates and imposes higher burdens on the foreign profits of U.S. companies, a global minimum tax would help prevent companies based in other countries from having a significant potential advantage. This coordination and the resulting tax revenue — not necessarily the goals of U.S.-based companies — rank high among the administration’s priorities.
“Competitiveness is more than the way U.S.-based companies behave against other companies in global merger and acquisition offers,” Ms. Yellen said in statements to the Chicago Board of Global Affairs. “It’s about making sure governments have stable tax systems that raise enough revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of government funding.”
Ms. Yellen’s statements came as finance ministers prepared to meet virtually for biannual meetings of the International Monetary Fund and the World Bank this week.