US Treasury Secretary Janet Yellen said on Sunday she was “confident” Congress would pass legislation to implement a global tax deal in the United States enacting a minimum international tax on large corporations.
The agreement negotiated by the OECD, which sets a global tax of 15%, aims to prevent international companies from reducing their tax bill by registering in countries with low rates.
“I am confident that what we need to do to comply with the minimum tax will be included in a reconciliation plan,” Yellen told ABC’s “This Week,” referring to the federal budget bill currently being debated in Canada. Congress.
The multibillion-dollar spending program is the cornerstone of President Joe Biden’s economic program.
Budget reconciliation is a political initiative that would allow Democrats, who control the House of Representatives and the Senate by a narrow majority, to act without Republican votes.
“I hope that (…) it will be adopted and we can reassure the world that the United States will do its part,” said Yellen, hailing the “historic” agreement.
The 136 countries now members of the global tax agreement represent 90% of the world’s gross domestic product.
Under the deal, they will be able to generate around $ 175 billion in additional revenue.
The OECD said countries aim to sign a multilateral convention in 2022, with a view to implementing the reform in 2023.
Each country signing the agreement must now incorporate the agreement into its own legislation. However, some questions remain, such as the ability of the Biden administration to push reform through Congress.
Democrats want to include the measure in the $ 3.5 trillion infrastructure spending package, but their Senate majority is so small the party cannot afford any defection from its ranks.
Two Democratic senators have said the amount, which is intended to fundamentally reform America’s infrastructure and tackle climate change, is too high.
The additional income from the international minimum tax would help fund Biden’s plans.
In addition to the minimum rate, the 136 countries also agreed to reallocate more than $ 125 billion in profits from about 100 of the world’s most profitable multinationals to countries around the world.
This means that companies will have to pay taxes in the countries where they do business and make profits, whether or not they are physically present here, a change that would affect big US tech companies like Facebook.
EXPLAINER: How a global deal curbs corporate use of tax havens
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Quote: Yellen Says “Confident” US To Implement Global Minimum Tax (2021, Oct 11) retrieved Dec 8, 2021 from https://techxplore.com/news/2021-10-yellen-confident-global- minimum-tax.html
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