U.S. Treasury Secretary Janet Yellen speaks during a daily press conference in the James Brady Press Briefing Room of the White House on May 7th in Washington, DC. The US economy created 266,000 jobs in April, far fewer than the expected 1 million jobs.
Alex Wong | Getty Images
Businesses around the world should pay at least 15% tax on their earnings, the Treasury Department said Thursday as part of its efforts to achieve a global business minimum.
The final interest rate could be even higher, according to a Treasury Department publication calling the minimum of 15% a “minimum amount” and discussions should continue to be ambitious and raise that interest rate.
U.S.-based companies currently pay a rate of 21%, a figure that was lowered during the Trump administration. Previously, the maximum rate was 35%.
At the suggestion of President Joe Biden, the tax rate would be increased to 28%, as part of a plan to increase taxes for both businesses and the highest earners.
But the White House wants to push its tax plans beyond the border.
Treasury Secretary Janet Yellen has touted the benefits of a global minimum corporate tax rate that would discourage companies from relocating to other countries to reduce their tax burden even though most of their operations are in the US
Yellen’s Treasury Department believes that “the international tax architecture needs to be stabilized, that the global playing field needs to be fair, and that we need to create an environment in which countries work together to maintain our tax bases and ensure that the global tax system is fair and is equipped. ” meet the needs of the global economy of the 21st century, “the department said in a press release.
Yellen lamented a global “race to the bottom” among countries cutting their interest rates to attract foreign companies.
Setting the global minimum would help reduce this incentive, although it is unclear how many countries are willing to participate.
“The Treasury Department has made it clear that a global minimum corporate tax rate would ensure that the world economy thrives on a level playing field in the taxation of multinational corporations, promoting innovation, growth and prosperity, while improving fairness for the middle class and working people.” the publication.
The news came after meetings with a steering group within the Organization for Economic Co-operation and Development which, according to the Treasury Department, involved “serious” talks on a global tax.
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