The United States Treasury Secretary Janet Yellen called on other countries to join Washington in setting a global minimum corporate tax to stem the erosion of government revenues.
“Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations,” said Yellen.
Yellen’s pitch came just days after the Biden administration announced it planned to raise corporate taxes to finance a massive Ksh. 217.79 trillion ($2 trillion) infrastructure plan for President Biden.
President Joe Biden on Monday defended his proposal to raise corporate taxes to help pay for his infrastructure spending plans, saying he was not worried the hike would harm the economy and that there was no evidence it would drive business abroad.
Speaking to reporters in Washington, President Biden again took aim at the 50 or 51 corporations on the Fortune 500 list that paid no taxes at all for three years in the U.S, saying it was time for them to pay their share.
Asked if raising the corporate tax rate to 28 percent from 21 percent would drive away corporations, Biden said: “Not at all… there’s no evidence of that.”
If the U.S. raises its tax rates and imposes higher burdens on U.S. companies’ foreign profits, according to the Wall Street Journal, a global minimum tax would help prevent companies based in other countries from having a significant potential advantage.
That coordination and the ensuing tax revenue—not necessarily the aims of U.S.-based companies—rank high on the administration’s priorities, said WSJ.
“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,” added Yellen
Ms. Yellen’s remarks came as finance ministers prepared to gather virtually for semiannual meetings of the International Monetary Fund and World Bank this week.
