Yellen calls for a global minimum corporate tax rate in his first major speech as Secretary of the Treasury

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“We are working with the G20 countries to agree on a global minimum corporate tax rate that can stop the race to the bottom. Together, we can use the global minimum tax to make sure the global economy thrives, on a more level playing field. in the taxation of multinational corporations and stimulates innovation, growth and prosperity, ”Yellen said in a speech to the Chicago Council on Global Affairs.

“Competitiveness is not limited to how companies headquartered in the United States compare to other companies in global M&A offerings,” she said in her remarks. , which represented his first major speech as Secretary of the Treasury.

“This is to ensure that governments have stable tax systems that generate sufficient income to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government.”

President Joe Biden’s infrastructure proposal, called the American Jobs Plan, would raise the minimum U.S. corporate tax to 21% and calculate it country by country to deter companies from sheltering profits in international tax havens .

The plan would also raise the corporate tax rate to 28%, from 21%. The rate had reached 35% before former President Donald Trump and Republicans in Congress cut taxes in 2017.

Yellen had previously called for a global minimum corporate tax rate, including during her confirmation process earlier this year, when she told a Senate panel that if confirmed, she would work “with our allies on a global tax system that protects US competitiveness while ensuring businesses pay their fair share. ”
The issue has been debated in recent years by members of the Organization for Economic Co-operation and Development, including in 2019, when some finance ministers discussed a potential plan that, among other things, would ensure multinational companies pay. a minimum tax level, discouraging them from shifting their profits to countries with lower tax levels. The plan, however, never materialized.

This story has been updated.

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