She intends to put an end to the race to the bottom of corporate tax, when the United States wants to finance an investment plan by increasing taxes on their companies. US Secretary of State for the Treasury Janet Yellen said on Monday April 5 that she wanted to push her international partners to agree on a minimum corporate tax rate, regardless of the country in which they are established.
“We are working with the G20 countries to agree on a minimum corporate tax rate, which could end the race to the bottom”, said the US Minister of Economy and Finance, during a speech in Chicago.
The objective is to “End this race to the bottom”, to which the countries are engaged, which, in order to attract companies to their territory and guarantee them a competitive environment, offer companies ever lower tax rates. Mme Yellen lamented this “30-year race towards ever lower corporate tax rates”.
“Together, we can use minimum global corporate taxation to ensure that the global economy thrives on a more level playing field in the taxation of multinationals.”, thus assured Mme Yellen. Defeating criticism of the negative consequences for businesses of such legislation, she said it could on the contrary stimulate “Innovation, growth and prosperity”.
Avoid being deserted by companies
If the United States is so inclined to harmonize corporate taxation, it is because they themselves have planned to make companies pay more, to finance the ambitious investment plan of $ 2 trillion over eight years. in transport, industry and Internet networks, presented on March 31 by US President Joe Biden. He wants to increase the corporate tax, which would go from 21% to 28%. If a minimum tax rate is adopted internationally, this would prevent the country from being deserted by companies, in favor of more “generous” neighbors.
The subject could be raised on Wednesday, at a meeting of the G20. The organization hopes to reach an agreement by the meeting of finance ministers and central bankers of member countries on July 9 and 10.
The draft agreement discussed at the G20 concerns all sectors of activity, but it is particularly acute for digital multinationals, which pay taxes often unrelated to the amount of their profits and have been the big winners in 2020 of the Covid-19 pandemic. Mr. Biden was recently offended that a teacher is subject to a tax rate of 22% when “Amazon and Others Pay No Federal Tax”.
During a Senate hearing a few days earlier, Mr.me Yellen had previously said he was in favor of raising US corporate taxes as part of a global agreement negotiated at the Organization for Economic Co-operation and Development (OECD). She had felt that negotiations “Productive” within the OECD could “Create a regime in which there is a minimum corporate tax rate” in the world.
