Why would other nations agree to this? Many use lower corporate tax rates to boost the domestic economy.
Janet Yellen to call for global minimum corporate tax rate
anet Yellen will use her first major address as Treasury secretary to argue for a global minimum corporate tax rate, Axios has learned, as she makes the case for President Biden’s plan to raise U.S. corporate taxes to fund his $2 trillion+ infrastructure plan.Why it matters: Convincing other countries to impose a global minimum tax would reduce the likelihood of companies relocating offshore, as Biden seeks to increase the corporate rate from 21% to 28%.
- “Competitiveness is about more than how U.S.-headquartered companies fare against other companies in global merger and acquisition bids,” Yellen will say today in a speech to the Chicago Council on Global Affairs, according to an excerpt of her prepared remarks obtained by Axios.
- "It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government."
- "We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom."
The big picture: President Trump lowered the U.S. rate from 35% to 21%, arguing that U.S. companies were at a global disadvantage and were being incentivized to relocate offshore.
- The average corporate rate in the G7 is 24%, with some nine countries recently lowering their corporate rate, according to the Tax Foundation, a conservative tax group.
- Biden’s plan would also raise the international minimum rate for foreign profits from U.S. companies from 10.5% to 21%, which would still be lower than the 28% domestic corporate rate.