WASHINGTON – Last Sunday, Treasury Secretary Janet Yellen expressed to the press that she was confident that the US Congress would approve the implementation of the global corporate minimum tax agreed by 136 countries.
The global corporate minimum tax rate requires taxing the big companies a 15% tax rate, agreed upon by 136 countries last Friday. Biden’s landmark deal also makes it harder for large companies to avoid these taxes.
Yellen stated that the global corporate minimum tax would be part of President Joe Biden’s spending initiatives, included in the reconciliation budget bill.
Yellen told ABC that the requirements for the minimum tax would be part of the reconciliation package. By implementing the global corporate minimum tax, Yellen hopes to assure the world that “the United States will do its part.”
The budget reconciliation also allows the Democrats to implement the changes without the Republican votes.
Consequently, treasury officials and tax experts said it would not require a treaty since 136 countries already agreed to the bill.
Since the US already implemented a minimum tax last 2017, the country just needs to increase the tax rate to comply with the agreement.
US treasury officials also expressed how this tax rate compliance increases the US’ competitive footing with other countries. Thus, the global minimum corporate tax is significantly less controversial than a higher overall corporate tax or an increased capital gains tax rate.
