Treasury Secretary Janet Yellen on Monday urged the adoption of a minimum global corporate income tax, an effort to offset any disadvantages that might arise from the Biden administration's proposed increase in the US corporate tax rate. Citing a "30-year race to the bottom" in which countries have slashed corporate tax rates to attract multinational businesses, Yellen said the administration would work with other advanced economies in the Group of 20 to set a minimum, the AP reports, "Competitiveness is about more than how US-headquartered companies fare against other companies in global merger and acquisition bids," Yellen said in a virtual speech to the Chicago Council on Global Affairs. "It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods." Yellen's speech came as the spring meetings of the World Bank and IMF began in a virtual format.
Low-tax countries might be cool to the idea, per NPR, which gave the example of Ireland. That country's lower taxes have drawn Apple, for one, to settle there. Republican Sen. Pat Toomey said Yellen's proposal was unlikely to make much progress overseas. He also said Republicans should reverse any corporate tax hike if they regain a congressional majority in upcoming elections. President Biden has proposed hiking the US corporate tax rate to 28% from 21%, partially undoing the Trump administration's cut from 35% in its 2017 tax legislation. Biden also wants to set a minimum US tax on overseas corporate income, and to make it harder for companies to shift earnings offshore. The increase would help pay for the White House's $2.3 trillion infrastructure proposal. "We have 51 or 52 corporations from the Fortune 500 who haven’t paid a single penny a day for three years?" Biden said Monday. "Come on." (Read more corporate tax stories.)