Yellen to press for global minimum tax during G-20 meeting in Europe
Treasury Secretary Janet Yellen will discuss the formation of a global minimum tax during a meeting with G-20 finance chiefs this weekend in Venice.
Yellen will travel to Europe to participate in G-20 meetings on Friday and Saturday that are intended to bolster a multilateral commitment to a global minimum tax, express support for climate change initiatives, and address the global economic recovery from the COVID-19 pandemic, senior Treasury officials said during a Tuesday call with reporters.
On Sunday, Yellen will deliver a keynote address at the Venice International Conference on Climate with her G-20 counterparts before traveling to Brussels in an effort to strengthen the country’s transatlantic economic relationship with the European Union and to meet with the Eurogroup.
The meeting comes just days after 130 out of 139 countries in the Organization for Economic Cooperation and Development agreed to a global minimum tax of at least 15%, an agreement that the White House has touted as historic. While the deal is only in broad strokes, the world’s largest countries are set to determine the details of the proposal over the coming months.
HERE ARE THE NINE COUNTRIES SPURNING GLOBAL MINIMUM TAX SOUGHT BY BIDEN
When asked if the exact global minimum tax rate, which is yet to be hashed out, is expected to be negotiated slightly upward of the 15% level, a senior Treasury official said that the United States does not expect that there will be a decision on the precise rate in the coming week. Rather, the official said they expect that aspect of the plan to develop during the next phase of negotiations after Yellen meets with other finance ministers this weekend.
Another Treasury official asserted that the global minimum tax is a way to make globalization fairer for working- and middle-class people, not just in the U.S. but also in other countries. The administration has repeatedly knocked the current international tax system as a “race to the bottom” that incentivizes countries to compete for lower corporate tax rates.
“For decades, the United States has participated in a self-defeating international tax competition, lowering our corporate tax rates only to watch other nations lower theirs in response. The result was a global race to the bottom: Who could lower their corporate rate further and faster? No nation has won this race,” Yellen said about the plan.
In terms of the legislative aspect of implementing a global minimum tax, Yellen has begun to have conversations with the chairmen of the Ways and Means Committee and the Finance Committee about provisions in the reconciliation bill that would align with the goal of a global minimum tax.
Because the current agreement is broad in nature, the U.S. will also have to engage China and other countries about how the plan should be implemented. Prior to the announcement that China was among the OECD supporters, France’s finance minister, Bruno Le Maire, said that rolling out an effective global minimum tax is “going to be a tough fight.”
Another major issue that is set to be addressed during this weekend’s gathering is global access to COVID-19 vaccines. For example, while nearly 60% of U.S. adults are fully vaccinated, India, which had a massive spike in cases and deaths in May, only has 5% of the country fully inoculated. President Joe Biden has pledged to donate 580 million doses by June 2022 and has produced a global COVID-19 framework.
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A senior Treasury official said that the U.S. will urge its global partners to avoid prematurely pulling back from a fiscal stimulus given the pandemic and other issues affecting the world. The official said that countries should be putting money into economic recovery efforts and highlighted Biden’s proposed spending packages.
During the meeting this weekend, the participants, who represent the world’s largest emitters of carbon, will also discuss climate change goals and how to implement emission-reduction measures that are in line with the Paris Agreement.
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Tags: News, Janet Yellen, G20, Taxes, Biden Administration, Europe, Globalization
Original Author: Zachary Halaschak
Original Location: Yellen to press for global minimum tax during G-20 meeting in Europe
