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The U.S. is pushing to end the “race to the bottom” corporate tax

Janet Yellen

Scott Murin | CNBC

Treasury Secretary Janet Yellen said Tuesday that the United States is taking a two-sided approach to the goal of introducing a global minimum tax on businesses while negotiating with a global consortium.

Ask countries around the world to implement The lowest tax paid by all companies The goal set by the White House is to prevent companies from moving their businesses to cheaper countries.

The purpose is for the administration Tax increase for US companies.. Mr Yellen said he has been encouraged by the progress of negotiations with other countries so far.

“We propose to raise the global minimum tax rate and close the tax avoidance hole that allows US companies to shift their earnings abroad,” he said at the Wall Street Journal CEO Council Summit. ..

Mr Yellen said the United States is in talks with member states of the Organization for Economic Co-operation and Development.

“We are very active in engaging with other countries, ending the global corporate tax competition to the bottom,” she said. “The global race to the bottom for corporate tax has led to the need to invest in infrastructure, education, R & D, etc. to drive growth and impact corporate competitiveness. I’m worried that I’m robbing you. “

“So we step up to help companies achieve their equally important financial priorities in doing so in a situation where they are more competitive and where global interest rates are also rising. I’m asking you to pay a little more, “she says. Said.

Some countries have publicly stated that they support Global minimum tax ideaAlthough it remains unpopular in some areas. US companies have long been involved in the “offshoring” practice of establishing settlements in low-tax countries, even though they do much of their business domestically.

The Trump administration has reduced the corporate tax rate to 21%. Joe Biden I want to raise it to 28%. In addition, the 2017 tax cut provided an incentive for businesses to remit their profits abroad.

Earlier that day, Yellen said tax cuts rarely encouraged investment and instead triggered share buybacks and dividend issuance for investors.

Apart from negotiations on tax levels, the administration is also seeking an agreement on how other countries are taxing American companies. This is the first that Yellen described as the two “pillars” of the Organization for Economic Co-operation and Development’s discussions with each country.

“The second pillar is about the world’s lowest taxes, and the first pillar is about these taxes that have been imposed on US companies from several countries,” she said. “We have proposed expanding the scope of Pillar 1 to reach an agreement not only for US technology companies, but also for the most profitable large companies in any sector of the world. I hope we can do it on both pillars. “

Yellen said the government is looking for ways to discourage companies from deducting taxes paid to tax havens.

Eventually, she said companies would pay more taxes in the United States, but she said income was needed to help fund the administration’s vast spending program. I did.

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The U.S. is pushing to end the “race to the bottom” corporate tax

Source link The U.S. is pushing to end the “race to the bottom” corporate tax

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