Leaders of the world’s largest economies endorse the establishment of a global minimum tax at the opening of the Group of 20 (G-20) summit in Rome on Saturday.
The global minimum tax aims to prevent companies from moving jobs or profits overseas in order to avoid paying taxes. President BidenFAA Administrator Appointed By Joe BidenTrump To Step Down At End Of March Senate Ballots Within 48 Hours Of Trump Administration Shutdown Deadline Issues Endorsements In Texas Congressional Races MORE and his administration has pushed the deal over the finish line in recent months.
“We have reached a historic agreement for a fairer and more efficient international tax system,” Italian Prime Minister Mario Draghi said on Saturday at the opening of the summit.
The deal would set a minimum global corporate tax rate of 15%, which administration officials say would generate $60 billion or more in additional revenue annually in the United States alone.
“The deal works because it removes incentives to outsource American jobs, it will help small businesses compete on a level playing field, and it will give us more resources to invest in our staff at home.” , said a senior administration official. told reporters on a call previewing the announcement.
“This is a game-changer for American workers, taxpayers and businesses,” the senior official added. “And in our view, it’s more than just a tax deal; it’s an overhaul of the rules of the global economy.”
The corporate minimum tax has won support from Democrats in Congress, and Biden has included it as part of his framework for a sweeping $1.75 trillion climate and social spending bill as a revenue generator. . The bill still has to pass through Congress, however; Biden had hoped to see movement before leaving for Europe, but was unsuccessful.
The global minimum tax was agreed by G-20 finance ministers earlier this year, but Saturday’s session marks the first time that country leaders will endorse the deal. The announcement was expected but nevertheless represented a significant development.
The Organization for Economic Co-operation and Development announced earlier this month that 136 countries have signed up to the global minimum corporate tax framework. The minimum tax will apply to companies whose turnover exceeds 750 million euros and is expected to generate 150 billion dollars in revenue per year.
By endorsing the deal on Saturday, G-20 leaders pledge to implement the deal by 2023.
treasury secretary Janet YellenJanet YellenThe Hill’s 12:30 Report: Negotiations Continue As Government Funding Deadline Approaches hailed the “historic” deal in a statement released later Saturday.
“This agreement will transform the global economy into a more prosperous place for American businesses and workers,” Yellen said. “Rather than competing on our ability to offer lower rates, America will now compete on the skills of our people, our ideas and our ability to innovate – which is a race we can win.”
After the close of the first plenary, a senior administration official said Biden “underscored the importance of this historic agreement during his remarks” and stressed that countries can tackle common interests despite d other disagreements.
The meeting also touched on the coronavirus pandemic and energy markets.
“The President underscored his commitment to ending the global pandemic and ensuring an inclusive global economic recovery, including by supporting developing countries through debt relief and enhanced SDR reallocation,” the President said. senior official. “He reminded G20 leaders that new pandemics can strike at any time, so it is important that we strengthen global health systems and do more to create the global health security infrastructure to ensure that we We are ready for the next pandemic.”
“The President stressed the need for balanced, well-supplied and competitive global energy markets so as not to undermine this critical moment of economic recovery,” the senior official said.
Updated at 11:39 a.m.