The Treasury Secretary of the United States, Janet Yellen, announced on Monday her intention to work with the G20 countries to implement a minimum corporate tax on a global scale for multinationals, one of the proposals in which the Organization for Cooperation and Development Economic (OECD) has been working for some time. The objective is for the tax to favor “stable and fair tax systems” and to stop the downward race that this tax has been suffering. Yellen explained his position in his first presentation at the Council on Global Affairs, in Chicago, as holder of the US economy.
In an online speech, Yellen condemned this race down “in the past 30 years”. For this reason, he emphasized, it is important to ensure that “Governments have stable tax systems that collect sufficient revenues and that all citizens share fairly the Government’s financial burden”. At the Chicago meeting, Yellen also criticized the isolationism of former President Donald Trump, noting that the America first“USA first, the Republican’s motto” should never mean “USA alone”.
The objective of this global rate is to prevent large corporations from settling in jurisdictions with lower taxation and subtracting revenue from public coffers, especially given the huge bill that will come with the crisis caused by the pandemic, which the United States intends to mitigate with an ambitious health plan. stimulus valued at 1.9 trillion dollars (10.7 trillion reais), already approved by Congress. This global minimum rate, emphasized Yellen, can be used so that the economy “develops with more equal opportunities” and “stimulates innovation, growth and prosperity”.
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For the former Fed chairwoman, credibility abroad “starts with domestic credibility”, so she gave as an example the planned increase in corporate tax in the United States, an eventual increase that faces a lot of resistance from the business class. Last week, Biden presented the details of his infrastructure program, one of the key pieces to rebuild and modernize the economy in the post-pandemic phase, with an investment of around two trillion dollars. Part of that plan, which will have to be given the green light in Congress in a process that is expected to be stormy, but which Democrats hope to end by July 4, will be financed by raising the current corporate tax rate to the current 21% —before of Trump’s tax reform in 2017, it was 35% – to 28%, and setting the minimum rate to be paid by U.S. companies for their profits abroad as 21%.
Last week, in his Senate appearance, Yellen had defended the tax increase because the country raised “a very small amount” through this fiscal figure.
The United States Treasury Secretary had already anticipated at the end of February, at a G20 meeting, the willingness to set a minimum fee for companies on a global scale around the world. “It is important to work with other countries to end the pressures of tax competition and the erosion of the tax base by companies,” he said on Monday.
Yellen’s speech comes a day before the International Monetary Fund (IMF) releases its 2021 forecasts at its April meeting, an announcement that this year will inevitably be marked by the expected exit from the pandemic tunnel. Bearing in mind that Yellen intends to participate in the joint meeting of the Fund and the World Bank (WB), the possibility that this global initiative can be debated cannot be ruled out.
The United States participates in talks conducted by the OECD with about 140 other countries to reach a global agreement on a minimum corporate tax. The OECD has been trying for years to design, in vain, a new system that adjusts to the profound transformations of the economy in the last decades, that is, adapted to the growing digitalization and the predominance of large multinationals, especially the technology giants, which are at the center controversy for his usual practice of dodging taxes.
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