The Strategist

US to call on countries around the world to impose a flat minimum tax on businesses


04/06/2021 - 04:56



New US Treasury Secretary Janet Yellen will call on all countries around the world to set a minimum corporate tax rate in her first policy speech, Axios learned. US government fears local businesses will move to other jurisdictions because of Biden's plans to raise corporate tax from 21% to 28%.



University of Michigan, Gerald R. Ford School of Public Policy
University of Michigan, Gerald R. Ford School of Public Policy
US Treasury Secretary Janet Yellen on Tuesday will call on countries around the world to introduce a minimum global corporate tax threshold, Axios writes. She will deliver her first policy address in her new rank. The official joined the administration with the arrival of Joe Biden in the White House, and before that she headed the Federal Reserve.

As Axios has learned, the US is already in tax talks with G20 countries to "stop the race to lower rates". According to Yellen, the competition should not just be about confronting US-incorporated companies with the rest, but also about ensuring sustainable tax systems so that governments get enough money and invest it in the public good. It is important that all citizens "share the burden of funding the government fairly," Axios quoted Yellen as saying.

If other countries can be persuaded to introduce a minimum global corporate tax, the likelihood of US companies moving offshore will be reduced, Axios said. This is a hot topic, given that US President Joe Biden's new economic plan calls for an increase in the US corporation tax by a third, from the current 21% to 28%. Bloomberg called the tax rate increase the biggest in the US since Bill Clinton. It is needed to fund Biden's $2.25 trillion programme. The tax was 35% until 2017, but then previous US president Donald Trump cut it by 14 percentage points.

source: axios.com