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Republicans threaten to block plans to amend Biden’s G7-backed global tax system Global economy

Joe Biden’s plan to review the international taxation system faces growing opposition from Republican opponents who call the proposal “crazy” and threaten to block the passage of historical agreements in the United States.

Treasury Secretary Janet Yellen has led the Biden administration’s attempts to mediate a global agreement on how businesses are taxed.

These efforts paid off over the weekend. G7 A group of wealthy countries supports a global minimum tax rate of at least 15%, allowing countries to tax some of the profits earned by large corporations on the basis of their revenues, not for tax purposes. I agreed to do it. ..

But as Biden heads to London for the G7 summit, US-led plans face strong opposition in Washington. Kevin Hassett, a former economic adviser to the Trump administration, said: Yahoo Finance It “doesn’t happen” on Tuesday.

With the 100-seat Senate evenly divided into Democrats and Republicans, Biden struggled to pass changes to international tax treaties with bipartisan support, forcing Democrats to vote alone to pass the bill. You may not get it.

Republican Senator Pat Toomey of Pennsylvania called the world’s lowest tax “crazy.”

“Sure, the fact that they had to convince all other countries to ensure a tax increase is a confession of the damage we’re doing to our country,” Toomy said. “They certainly don’t have the votes to approve this kind of treaty they are considering.”

Republican Senator John Barrasso of Wyoming, who chairs the Senate Republican Conference, described the plan as “anti-competitive, anti-US, and harmful to us as we seek to continue economic growth.” .Pandemic. “

Hasett told Yahoo Finance: The EU basically needs unanimity to do anything, and there is no way to rush it.

“For the United States, it’s a big question whether this will pass. Analyzing this, basically what we’re doing is granting a hunting license abroad and earning money from previously unobtainable US companies. Is to get. “

The agreement came when the Biden administration was trying to raise US corporate tax from 21% to 28%. Rising global interest rates are seen as the key to preventing US companies from choosing to move their businesses abroad when interest rates rise.

In return, the G7 countries have agreed to abolish digital service taxes on US tech companies that have led to threats by the Biden administration. Retaliation tariffs We carry a variety of products from countries such as the United Kingdom, Italy, Spain, Turkey and India.

International negotiations on treaties are likely to be long and complex. The UK is trying to exclude London’s financial services companies from global tax reform.

Prime Minister Rishi Sunak fears that Biden’s proposal could be a major deterrent to banks doing a lot of business from London, exacerbating Brexit’s impact on the shift in financial transactions to Amsterdam. ing.

It is unclear whether all forms of financial services, from banks to mutual funds, insurers and hedge funds, will be excluded in the process still under negotiation.

Chris Sanger, Risk Tax Leader of World Government and Accounting Office EY, said: The question is how to manage these exceptions, eliminating the complexity they bring. “

Snack praised G7 Finance Minister Makes Tax Treaty “Historical” He agreed with the framework on Saturday, adding that he would “force the largest multinational tech giant to pay fair taxes in the UK.”

However, there are still gaps in the agreement, and important details will be set out at a conference in Venice next month between a wider range of G20 groups, including China, India and Brazil. Changes will then be negotiated among 139 countries in a process supervised by the Organization for Economic Co-operation and Development (OECD), with the aim of reaching a final agreement by October.

Yellen called the weekend agreement “historic” and said it “ends competition to the bottom of corporate taxes and ensures the fairness of the US middle class and workers around the world.”

Republicans threaten to block plans to amend Biden’s G7-backed global tax system Global economy

Source link Republicans threaten to block plans to amend Biden’s G7-backed global tax system Global economy

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