“I hope[this text]will be approved and we can assure the world that the United States will do its part,” Yellen told ABC. Each country’s parliaments must now ratify the global agreement and adapt it to their legislation.
The 136 signatories, which represent 90% of global GDP, are expected to generate about $173.5 billion in additional revenue through this minimum tax, which will be implemented globally from 2023.
However, some questions remain unanswered, starting with the Joe Biden administration’s ability to push reform through the Senate and House of Representatives.
“I am convinced that everything we need to do to respect minimum taxes will be included in the reconciliation process,” said Janet Yellen, referring to a parliamentary style that allows budget legislation to be passed by a simple majority.
Democrats want to use it to pass Biden’s massive social reform, initially set at $3.5 trillion, which includes tax increases for larger corporations and wealthier Americans.
The “reconciliation” measure would allow the Democrats, who have a small majority in Parliament, to dispense with the votes of the Republican opposition. But the majority in the Senate is so small that the ruling party cannot withstand growing internal divisions.
Two Democratic senators consider the amount of this spending to be high, and it is aimed at fundamentally reforming the American social fabric and combating climate change. The additional revenue generated by the multinational tax should allow for partial funding of this plan.