U.S. Treasury Secretary Janet Yellen said on Monday that she is working with G20 countries to agree on a global corporate minimum tax rate and pledged that restoring U.S. multilateral leadership would strengthen the global economy and advance U.S. interests.
In a speech ahead of her first International Monetary Fund and World Bank Spring Meetings as Treasury Secretary, Yellen, according to Reuters, signaled stronger U.S. engagement on issues from climate change to human rights to tax base erosion.
A global minimum tax proposed by the Biden administration could help to end a “30-year race to the bottom on corporate tax rates,” Yellen told an online event hosted by the Chicago Council on Global Affairs.
The global minimum tax is a key pillar of President Joe Biden’s $2 trillion infrastructure spending plan, which calls for an increase in the U.S. corporate tax rate to 28% while eliminating some deductions associated with overseas profits read more .
Without a global minimum, the United States would again have higher rates than a number of other major economies, tax experts say, while the U.S. proposal could help jump-start negotiations for a tax deal among major economies.
Yellen also said she would use the IMF and World Bank meetings this week to advance discussions on climate change, improve vaccine access for poor countries and push countries to do more to support a strong global recovery from the coronavirus pandemic.
“We will fare better if we work together and support each other,” Yellen said.
Her more cooperative approach marks a sharp contrast to the “America First” approach of her Trump administration predecessor, Steven Mnuchin. She has backed a $650 billion increase in IMF monetary reserves that Mnuchin opposed last year, and said she will work with international institutions and partners on carbon emissions reduction targets.