Is this the most important tax in the global economy in recent decades? It is quite possible, but its implementation will be anything but easy. The US Treasury Secretary believes that this is the way to resist a kind of “tax war” and end what she calls a “race to the bottom of the well that has been going on for 30 years”.
The work with the G20 countries thus aims to reach an agreement on a minimum rate of global corporate tax, at a time when the USA is preparing (if Biden manages to approve the change) to, already in January 2022, increase the corporate taxes from 21% to 28%, something that will make it possible to finance the new $ 2 billion infrastructure package.
This ongoing increase will result in a cut in corporate profits as the economy recovers and Biden’s plan could cut corporate profits on the S&P 500 by at least 10%, analyst Dave Zion tells the Washington Post, who indicates that those who have more domestic income will be more affected than those who have more income from outside the United States.
Yellen explained on a visit to the Global Affairs Council in Chicago that he will also take advantage of annual IMF and World Bank meetings this week to advance discussions on climate change, improve access to vaccines and encourage countries to support a recovery strong global.
The experienced Treasury secretary says it is important to ensure that governments “have stable tax systems that increase sufficient revenues from essential public goods and respond to crises, and that all citizens share fairly the burden of financing the government” , at a time when there has been pressure even within the OECD to create digital taxes on technology giants – something the Trump administration has always refused.
According to Reuters, a Treasury official explained to journalists that it was important to have the world’s major economies available to create such a global minimum tax to make it effective.
The United States is therefore prepared to use its own tax laws to prevent companies from transferring profits or moving to countries that are tax havens and may try to encourage other large economies to do the same.
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