In a speech made before the annual meeting of the International Monetary Fund (IMF) and the World Bank, Yellen confirmed that he is discussing a minimum value with the G20 countries to be adopted worldwide in the coming years.
Yellen’s request is part of a broader strategy by US President Joe Biden to implement a $ 2.3 trillion plan in infrastructure spending in the United States. To finance the program, the Democrat proposed to increase the corporate income tax rate from 21% to 28%, with the aim of raising US $ 2 trillion in 15 years.
The American government will also increase the minimum fee charged on the revenue of American companies abroad and strengthen the rules to try to prevent foreign companies with operations in the USA from transferring their production to countries that charge less taxes.
Yellen argued that the global minimum rate is necessary to prevent companies from running for lower taxes in other countries, which forces the progressive dismantling of existing regulatory standards in various parts of the world.
Excerpts from Yellen’s speech at a Chicago Council on Global Affairs event were anticipated by the American website Axios. According to the Treasury secretary, one of the consequences of the interconnected world was a 30-year race to cut corporate taxes around the world.
“President Biden’s proposals, announced last week, call for bold domestic action, including raising the minimum US tax rate, and renewed international commitment, recognizing that it is important to work with other countries to end the pressures of competition tax and erosion of the corporate tax base, ”said Yellen at the virtual event.
In addition to the G20 talks, the United States and other countries are discussing the creation of a global tax under the leadership of the Organization for Economic Cooperation and Development (OECD). Negotiations have advanced, but are delayed because of the pandemic.
In the speech, Yellen criticized the Donald Trump administration for American isolation for the past four years and said the U.S. will resume its role as a global economic leader to address the crisis caused by the covid-19 pandemic and other challenges such as climate change.
“In the past four years, we have seen firsthand what happens when the United States moves away from the global stage,” said Yellen. “’America First’ [o slogan diplomático de Trump] it should never mean America alone. ”
The Biden government also intends to work with China, but will not avoid conflicts if necessary. Yellen said there will be collaboration in areas where partnerships are possible and competition in other sectors important to the United States.
For Yellen, the US will benefit from a strong global economy. However, she warned that the world is susceptible to an ever-widening divide between rich and poor countries, in part because of differences in the ability to control covid-19 and initiate a post-pandemic economic recovery.
The Treasury secretary called on advanced economies to help ensure that low-income countries have ample access to vaccines, tests and medicines against covid-19. It is also necessary, according to Yellen, to help them economically and maintain fiscal measures adopted to face the crisis caused by the virus.
As part of that aid, Yellen cited the agreement reached by the IMF to inject $ 650 billion in additional liquidity, through a new allocation of Special Drawing Rights (DES), and to give a breath to vulnerable countries. According to her, this will make more money available so that the governments of these nations can invest more in vaccines and in health.
Content published by Valor PRO, Valor’s real-time service
Get the latest news delivered to your inbox
Follow us on social media networks