Yellen promises international cooperation in the USA and calls for a global minimum tax
© Reuters. FILE PHOTO: FILE PHOTO: US President-elect Joe Biden announces members of his policy team in Wilmington, Delaware
By David Lawder
(Reuters) U.S. Treasury Secretary Janet Yellen said Monday that she is working with G20 countries to agree a minimum global corporate tax rate and promised that restoring U.S. multilateral leadership will strengthen the global economy and U.S. interests would promote.
In a speech to her first spring meetings of the International Monetary Fund and the World Bank as finance minister, Yellen signaled a stronger commitment by the US on issues ranging from climate change and human rights to the erosion of the tax base.
A global minimum tax proposed by the Biden government could help end a “30-year race for corporate tax rates,” Yellen said at an online event organized by the Chicago Council on Global Affairs.
The global minimum tax is a key pillar of President Joe Biden’s $ 2 trillion infrastructure spending plan, which includes increasing the U.S. corporate tax rate to 28% while removing some deductions related to overseas profits.
Without a global minimum, the United States would again have higher tax rates than a number of other major economies, tax experts say, while the US proposal could help kick-start negotiations on a tax treaty between major economies.
Yellen also said she will use the IMF and World Bank meetings this week to fuel discussions on climate change, improve access to vaccines for poor countries, and urge countries to do more to build a strong global Support recovery from the coronavirus pandemic.
“We’ll do better if we work together and support one another,” said Yellen.
Their more collaborative approach contrasts sharply with the “America First” approach of their predecessor in the Trump administration, Steven Mnuchin. She has backed a $ 650 billion increase in the IMF’s foreign reserve assets, which Mnuchin spoke out against last year, and said she would work with international institutions and partners on targets to reduce carbon emissions.
Mnuchin had routinely spoken out against any clues about climate change in the G20 and other communications from large multilateral assemblies.
Yellen also has a key mnuchin https://www.reuters.com/article/us-g20-usa-oecd/us-drops-safe-harbor-demand-raising-hopes-for-global-tax-deal-idUSKBN2AQ2E6 serene demand from international tax negotiations – a provision that would allow large U.S. tech companies to opt out of new digital service taxation regulations.
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The new CFO said it was important “to end the pressures of tax competition” and to ensure that governments “have stable tax systems that generate sufficient revenues from essential public goods and respond to crises, and that all citizens meet the burden of government funding divide . “
Separately, a US Treasury Department official told reporters that it was important to have the world’s major economies on board with a global minimum tax to make it effective, but did not say how many countries it would take.
The official said the United States would apply its own tax laws to prevent companies from moving profits or residence to tax haven countries and encouraging other large economies to do the same.
The Biden Plan provides a corporate tax rate of at least 21%, which comes with the elimination of income exemptions from countries that do not have a minimum tax. The government says the plan will prevent jobs and profits from being shifted overseas.
Yellen said in her remarks that while advanced economies had successfully supported their economies through the COVID-19 pandemic, it was too early to declare victory and that low-income countries need more support to gain access to vaccines receive.
She also said the Biden administration will defend human rights, adding that US economic relations with China will be “competitive where it should be, cooperative where it can be, and controversial where it has to be” .
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