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‘Stop the Race to the Bottom’: Yellen Calls for Global Minimum Tax Rate
Treasury Secretary Janet L. Yellen called for a global minimum corporate tax on Monday to prevent companies from evading taxes, as the Biden administration focuses on raising revenue in the U.S. to pay for a multi-trillion-dollar infrastructure package.
Another consequence of an interconnected world has been a 30-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’s about making sure the 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. President Biden’s proposals announced last week call for bold domestic action, including to raise the U.S. minimum tax rate and renewed international engagement, recognizing that it’s important to work with other countries to end the pressures of tax competition and corporate tax base erosion. We’re working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom. Together, we can use a global minimum tax to make sure the global economy thrives, based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth and prosperity.
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