US Treasury Secretary Janet Yellen wants Senate to ratify global corporate tax deal

On Sunday, October 10, Janet Yellen, the US Treasury Secretary, expressed her optimism that the US Congress will approve a fundamental pillar of the global corporate tax agreement reached by 136 countries and jurisdictions. Referring to a spending package being negotiated by the White House and Democratic lawmakers, She hoped that everything needed to do to comply with the minimum tax would be included in a reconciliation package, reported news agency Xinhua citing ABC News. She stated that the agreement will be passed, reassuring the rest of the world that the US is ready to do its part. 

Yellen's remarks came after the Organization for Economic Cooperation and Development (OECD) declared on Friday, October 8, that fundamental reform of the international tax system had been completed, including a global minimum corporate tax rate of 15%. This is an agreement that will go down in history. Stopping the decades-long race to the bottom on corporate taxation, in which countries try to decrease their taxes to attract our businesses, is critical for American workers, according to Yellen. "This agreement to put a cap on how low tax rates can go, so that we may all benefit from tax revenue generated by successful firms rather than just workers. She went on to say that this is something they really need to make globalisation work, reported Xinhua news agency. 

The agreement will be presented to G20 leaders

The global corporate tax agreement will also reallocate over 125 billion dollars in profits from around 100 of the world's largest and most profitable multinational corporations to countries across the world, ensuring that these corporations pay a fair share of tax wherever they operate and gain profits. According to the OECD, the agreement will be presented to the Group of 20 (G20) Finance Ministers meeting in Washington DC on October 13 and the G20 Leaders' Summit in Rome, Italy at the end of this month. The proposal, which has the support of the Joe Biden administration, has been slammed by Republican Senate Finance Committee Chairman Mike Crapo and Republican House Ways and Means Committee Chairman Kevin Brady. They stated that rather than reaching a deal that would bring stability and eliminate digital services taxes immediately, the Biden administration has used this global forum to push its short-sighted domestic tax agenda, reported Xinhua news agency. 

Image: AP