130 countries join U.S. push for global minimum tax on large corporations
President Joe Biden's corporate tax plan got a boost Thursday, as 130 countries and jurisdictions signed on to an agreement that would implement a global minimum tax for companies. The administration says the agreement, the first major overhaul of international taxation in a century, will level the playing field and help American business compete.
Treasury Secretary Janet Yellen, who has been leading the United States push for a global minimum tax of at least 15%, called the announcement a historic day for economic diplomacy.
"Today's agreement by 130 countries representing more than 90% of global GDP is a clear sign: The race to the bottom is one step closer to coming to an end. In its place, America will enter a competition that we can win; one judged on the skill of our workers and the strength of our infrastructure," Yellen said in a statement. "We have a chance now to build a global and domestic tax system that lets American workers and businesses compete and win in the world economy."
Yellen said having lower tax rates have not only failed to attract new businesses but have deprived countries of funds for infrastructure, education and efforts to combat the coronavirus pandemic.
The two-part framework, coordinated by the Organization of Economic Cooperation and Development, was first signed onto by the G7 countries in early June as their top finance officials met in London.
It gives countries where a company does business the right to tax some $100 billion in multinational company profits, including digital ones, regardless of the company's home country or if it has a physical presence in the nation. It also supports the implementation of a global minimum tax of at least 15%. The OECD estimates the global minimum tax would generate around $150 billion in additional global tax revenues a year.
