Yellen to urge global minimum company tax to stop venue-hopping

Henrietta Strickland
April 6, 2021

U.S. Treasury Secretary Janet Yellen speaks during a virtual roundtable in Washington on February 5, 2021.

During Donald Trump's presidency, the business-minded Republican slashed the USA rate from 35% - a global high - to 21%, arguing the previous rate put American companies at a global disadvantage and resulted in many of them moving their businesses overseas.

According to the Tax Foundation, a conservative tax group, the worldwide average corporate tax rate is just under 24%.

"Over the last four years, we have seen first hand what happens when America steps back from the global stage", Ms Yellen said pointing to a reversal of Mr Trump's worldwide economic policies.

Ms Yellen specifically criticised the strategy of the previous administration, decrying four years when the United States "isolated ourselves and retreated from the worldwide order that we created".

U.S. Treasury Secretary Yellen says global minimum tax needed, too soon to declare victory over COVID-19

Separately, a U.S. Treasury 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.

The new multilateral approach begins with the USA taking a leading role in working with Group of 20 nations to find an appropriate minimum corporate tax.

They say Canada will likely benefit if it can work with the United States on a global reform of tax rates so corporations can't play one country off against another by threatening to change locations. Yellen wants to halt what she described as an global "race to the bottom" by countries competing to lure corporations with lower taxes.

The news outlet made clear that "by trying to convince other countries to impose a global minimum tax, Yellen is acknowledging the risks to the American economy if it acts alone in raising corporate rates".

"Our economic relationship with China, like our broader relationship with China, will be competitive where it should be, collaborative where it can be, and adversarial where it must be", she added.

Other reports by Click Lancashire

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