Treasury nominee Janet Yellen on why U.S. could afford a higher corporate tax rate
Janet Yellen, selected by President Joe Biden as Treasury Secretary, said the US could afford a higher corporate tax rate if it coordinated with other economies around the world..
«We look forward to active cooperation with other countries in the (Organization for Economic Co-operation and Development) negotiations on taxes on multinationals to try to stop the destructive global corporate tax practice that is plunging the sector to the bottom.», – she said.
During his presidential campaign Joe Biden proposed to raise the corporate rate to 28% from the current 21%. Before the tax cuts in 2017, the figure in the United States was 35%.
However, Janet Yellen was quick to warn that any plan to seek higher corporate rates could only begin after the administration senses the US has overcome the coronavirus pandemic crisis.
The Senate Finance Committee will soon be discussing whether she should be approved for the office of cabinet minister.. If approved, Yellen will become the first woman to head the Treasury..
Biden plans that ultimately, as part of a larger package that will include significant spending and investment proposals, he would like to reverse some of the 2017 tax decisions that benefited only wealthy Americans and large companies..
«The President wants to repeal the law that stimulates offshore operations and profit making. However, he made it very clear that he did not support the complete abolition of the 2017 tax law.», – Yellen said.
She also pledged to lawmakers that she will prioritize the needs of ordinary workers and ensure that the US can offer well-paid jobs in urban and rural areas..
It is worth noting that Yellen supported the stimulating Biden’s $ 1.9 Trillion Plan, Says Bill Will Help Sufferers households and businesses. The measure includes expanded unemployment benefits, university funding and the creation of a nationwide vaccination program.
Former Federal Reserve Chairman Says Higher Corporate Rates Will Be Part Of A Broader Plan To Remove Part Of Tax Law Donald Trump. However, for this to happen, the economy must get significantly stronger..
The main purpose of Trump’s tax cuts was to encourage American companies to generate foreign profits in the United States, moving away from low-tax jurisdictions such as Ireland and Bermuda.. Before the adoption of the bill, many multinational companies created subsidiaries abroad, creating their profits with patronage from the American tax authorities.
An American manufacturer, for example, could buy goods from its Irish subsidiary, profit at a lower rate, and sell the goods in the United States..
The OECD has been looking for a way out of this situation for many years. At the end of 2019, the authority proposed a global minimum threshold that would apply to companies with income from cross-border activities paying taxes below a certain level..
Yellen proposes to work with other countries to raise corporate tax rates around the world. Thus, if the US wanted more revenue from raising corporate taxes, it could do so more efficiently, since corporations would not have a much more attractive alternative..