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Home / US / Yellen called for the lowest corporate tax rate in the world in his first important speech by the Chancellor of the Exchequer

Yellen called for the lowest corporate tax rate in the world in his first important speech by the Chancellor of the Exchequer



“We are working with the Group of 20 (G20) countries to agree on a global minimum corporate tax rate that can prevent competition to the bottom. We can jointly use the global minimum tax to ensure that the global economy flourishes in a more level playing field. Taxes stimulate innovation, growth and prosperity,” Yellen said in a speech at the Chicago Council of Global Affairs.

In her speech, she said: “Competitiveness is not just how companies based in the US can compete with other companies in global M&A bidding.” This was her first important speech as the Secretary of the Treasury.

“This is to ensure that the government has a stable tax system to raise enough income to invest in basic public goods and respond to crises, and to make all citizens fairly bear the burden of raising funds for the government.”

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President Joe Biden’s infrastructure proposal (known as the “American Jobs Plan”) will raise the minimum tax rate for American companies to 21% and calculate it country by country to prevent companies Take refuge in an international tax haven.

The plan will also increase the corporate income tax rate from 21% to 28%. Before former President Donald Trump and Congressional Republicans cut taxes in 2017, the tax rate was as high as 35%.

Yellen had previously called for the establishment of the world’s lowest corporate tax rate, including in the confirmation process earlier this year, when she told the Senate panel that if confirmed, she would “work with our allies to work on a global tax system that protects America’s competitiveness. At the same time make sure that the company pays their due share.”
In recent years, members of the Organization for Economic Cooperation and Development have discussed this issue, including in 2019, when some finance ministers discussed a possible plan that, among other things, would ensure that multinational companies pay a minimum tax rate, thereby avoiding Encourage them to transfer profits to countries with lower taxes. However, the plan was never realized.

This story has been updated.


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