U.S. Yellen “Stop the’bottom competition’ of corporate tax in each country…cooperate with G20”

Input 2021.04.06 07:58

Joe Biden’s US administration is speeding up work to set a lower limit on global corporate tax rates for corporate tax hikes, which had been a pledge for presidential elections. After the Corona 19 pandemic, it will promote tax increases in order to raise large-scale finances necessary for economic stimulus measures and infrastructure investment, but will prevent countries from competing to cut corporate tax rates to attract companies.

According to Reuters on the 5th (local time), US Treasury Secretary Janet Yellen delivered a speech at the Chicago International Council on International Affairs (CCGA), saying, “We must stop the’bottom competition’ of corporate taxes for 30 years.” “We are working with 20 major countries (G20) to set it up,” he said.

“It is important to end the pressure of tax competition,” said Yellen. “It is important to ensure that each country’s governments get enough tax revenue for essential public goods and have a stable tax system to respond to the crisis.” To this end, he added that it will discuss economic recovery measures such as improving vaccine accessibility at the International Monetary Fund (IMF) and World Bank (WB) meetings scheduled this week.

A senior Treasury official told Reuters, “It is important that other major economies in the world bring this together so that the corporate tax floor setting works.” I would recommend other countries to do the same,” he said.

However, the public opinion is that it is unlikely that underdeveloped countries that are urgently seeking business will accept the US proposal. In addition, it is difficult to argue that if the US raises the corporate tax rate, companies that are reluctant to invest in the US will exit overseas and adversely affect job creation. Reuters analyzed that Minister Yellen was also conscious of these concerns and expressed the US willingness to bring about international cooperation.

Earlier, President Biden announced that he would promote legislation to raise the corporate tax rate from the current 21% to 28%. In addition to raising the corporate tax rate, Bloomberg News reported that the U.S. administration increased the maximum income tax rate for high income earners of $400,000 or more per year (37% → 39.6%) △ Increased the tax rate for capital income of $1 million or more per year He said it is considering expanding the three ranges.