Treasury Secretary Janet Yellen said Monday that she is working with the world’s most influential countries to end the “race to the bottom” in corporate tax rates. “We are working with the G-20 nations to agree on a global minimum corporate tax rate,” which can stop this race, Yellen said in a virtual address to the Council on Global Affairs in Chicago.
The United States wants to end the various tax games that American companies use to cut taxes, create investments or claim tax havens as their residence, a Treasury official said. US pharmaceutical and tech companies have been aggressive in accounting movements that transfer income and contribute to a foreign subsidiary located in a low-tax country. Analysts said that some countries, like Ireland, will not agree to a higher tax rate. A Treasury official agreed that some countries may not agree to a global minimum tax, but said tax gimmicks would be minimized if the United States and other major economies agree to the reforms. International tax changes for multinationals are a key part of the Biden administration’s plans to pay for a $ 2.3 trillion infrastructure spending plan. The administration is also calling for an increase in the corporate tax rate from 21% to 28%.