Treasury Secretary Calls for Negotiations for Global Minimum Corporate Tax Rate
Treasury Secretary Janet Yellen said the U.S. is working with the world's 20 largest economies in the hopes of arriving at “a global minimum corporate tax rate that can stop the race to the bottom.” If that agreement included an approach to taxation of the digital giants such as Google and Facebook, that would also deflate the digital services tax controversy, which could otherwise lead to additional 25% tariffs on more than $800 million in goods (see 2103290049).
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Yellen, who spoke via webcast to the Chicago Council on Global Affairs on April 5, would also be able to de-fang business and Republican opposition to the corporate tax increases needed to pay for trillions in infrastructure and social service spending if the companies and politicians could no longer say that the U.S. corporate tax rate was higher than competitor countries' rates. Yellen said there “has been a thirty-year race to the bottom on corporate tax rates. Competitiveness is about more than how U.S.-headquartered companies fare against other companies in global merger and acquisition bids. 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.”
Yellen also talked about the benefits of developing countries' growing prosperity, noting that in 1990, 40% of U.S. exports were sold to emerging economies, and in 2020, that proportion was 60%. She also noted that jobs at exporting firms pay more than at companies that don't export.
She didn't touch on sanctions, the purview of her agency, but said, “Our economic relationship with China, like our broader relationship with China, will be competitive where it should be, collaborative where it can be, and adversarial where it must be. We will defend democracy and the human rights of all people.”