US Treasury Secretary Janet Yellen said the United States will negotiate with the rest of the G20 nations on harmonizing minimum corporate taxes. “Together, we can use global minimum taxes to ensure that the economy thrives on a level playing field for multinational corporations and is driven by innovation, growth and prosperity,” he said.
The North American official’s comments are part of President Joe Biden’s recent proposal to raise the corporate tax on income from the current 21 percent to 28 percent, to recoup part of the cut introduced by the previous Donald Trump administration, which lowered that tax from 35 percent. On a larger scale, Yellen said she wanted to “end 30 years of low corporate tax rates.”
Democratic administration is seeking to increase corporate income tax to fund a massive $ 2.3 trillion infrastructure plan to create jobs. Under the umbrella of the new global taxation, Yilin wants to prevent companies from avoiding imposing higher taxes by shifting their activities to other regions with lower taxes. That is why he called for “an international effort to terminate a profession to reduce this tax to a minimum in the search for competitive advantage”. With global taxation, companies will be barred from implementing typical tax evasion measures that disguise operations in low-tax jurisdictions.
“The proposal announced by President Biden calls for ambitious measures, including raising the minimum corporate tax rate in the United States and renewing commitment at the international level, while recognizing the importance of working with other countries to end tax competition pressures. And the erosion of the corporate income tax.” Yellin, who has made clear that he wants to push for an international tax deal within the framework of the Organization for Economic Cooperation and Development (OECD), aims to establish a series of standards that include technology companies.
Due to its global nature, the initiative recalls the so-called “Tobin Tax”, a financial transaction tax that began with the mortgage crisis in 2008. The idea of this tax was to reduce the volatility of international exchange markets and boost the finances of nation-states.