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Yellen calls for a minimum global corporate tax rate in his first major address as Treasury Secretary

“We are working with the G20 countries to agree on a minimum global corporate tax rate that can end the race to the bottom. Together, we can use the global minimum tax to ensure that the global economy thrives, on a more level playing field. in the taxation of multinational corporations and stimulates innovation, growth and prosperity, ”Yellen said in a speech to the Chicago Council on Global Affairs.

“Competitiveness is not all about how US-based companies compete against other companies in global M&A tenders,” she said. during these remarks, which represented his first major address as Secretary of the Treasury.

“This is to ensure that governments have stable tax systems that generate enough revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of funding government.”

President Joe Biden’s infrastructure proposal, called the U.S. Jobs Plan, would raise U.S. corporate minimum taxes to 21% and calculate it country by country to deter companies from sheltering their profits in shelters. international tax havens.

The plan would also increase the corporate tax rate to 28%, from 21%. The rate hit 35% before former President Donald Trump and Republicans in Congress cut taxes in 2017.

Yellen had previously called for a global minimum corporate tax rate, including during her confirmation process earlier this year, when she told a Senate committee that if confirmed, she would work “with our allies. on a global tax system that protects US competitiveness while ensuring businesses pay their fair share. ”
The issue has been debated in recent years by members of the Organization for Economic Co-operation and Development, including in 2019, when some finance ministers discussed a potential plan that, among other things, would ensure multinational companies pay. a minimum level of taxation, which discourages them from shifting their profits to countries with low tax rates. The plan, however, never materialized.

This story has been updated.

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