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Yellen pushes minimum corporate taxes, no more fossil fuel breaks, to pay for infrastructure

Economic IndicatorsApr 07, 2021 12:55PM ET
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© Reuters. FILE PHOTO: U.S. President-elect Joe Biden announces members of his economic policy team in Wilmington, Delaware

By David Lawder

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen on Wednesday fleshed out the details of a corporate tax hike plan linked to President Joe Biden's infrastructure investment proposal, aiming to raise $2.5 trillion in new revenues over 15 years by deterring tax avoidance.

Yellen's plan relies on negotiating a 21% global minimum corporate tax rate with major economies and a separate 15% minimum tax on 'booked' income aimed at the largest U.S. corporations. Dozens of big U.S. companies use complex tax strategies to reduce their federal tax liabilities to zero.

Yellen said that promises of increased U.S. investment by corporations under the 2017 Republican tax cuts failed to materialize. Instead, the Trump-era cuts led to a dramatic drop in tax revenue as a share of economic output, with continued incentives to shift profits offshore, she told reporters on a conference call.

"Our tax revenues are already at their lowest level in a generation. And as they continue to drop lower we will have less money to invest in roads, bridges, broadband and R&D."

The Treasury plan also would eliminate a range of tax breaks for the fossil fuel industry, a move it said would raise revenues by $35 billion over 10 years. It will replace these with new clean energy tax incentives including for electric vehicles and efficient electric appliances.

The Treasury plan would modify the 2017 version of a global minimum tax, the 10.5% Global Intangible Low-Taxed Income tax (GILTI), by raising the rate to 21% and applying it on a country-by-country basis.

It would also replace a separate 10% minimum tax aimed at stopping the shift of profits to tax havens, replacing it with a new system, also at 21%.

Biden has sharply criticized Amazon.com Inc (NASDAQ:AMZN) and other large companies for paying "not a penny" in corporate income taxes in recent years. A new 15% alternative minimum tax for corporations, based on booked income reported to shareholders, aims to ensure that they pay at least some taxes.

Amazon CEO Jeff Bezos late on Tuesday said he supports a hike in the U.S. corporate tax rate, but did not specify a specific level that was acceptable.

Treasury said it estimates that some 45 corporations would have seen an average $300 million annual tax liability under the proposed minimum, raising some $13.5 billion in new revenues.

Yellen pushes minimum corporate taxes, no more fossil fuel breaks, to pay for infrastructure
 

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Comments (15)
Catholic Man
CatholicMan Apr 11, 2021 12:16AM ET
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more democratic silliness
Fred Smith
Fred Smith Apr 07, 2021 6:11PM ET
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Great! Oil companies pay $35B so greenies can give away $300B (10x) in EV subsidies! Only way to make $TSLA profit.
Forex Harbingers
Forex Harbingers Apr 07, 2021 4:55PM ET
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The agenda is in full view now, and half of America just doesn't care.
John Raymond
John Raymond Apr 07, 2021 4:47PM ET
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watch corporate investment and profits again leave the us
John Raymond
John Raymond Apr 07, 2021 4:46PM ET
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genuine real infrastructure investment can be paid for by redirecting a lot of pension fund investment as in europe and elsewhere. it does not necessitate tax increases. so what are the tax increases really for. bunch of liars yet again
John Raymond
John Raymond Apr 07, 2021 4:43PM ET
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us corporates returned over 2 trllion to the us under trump's tax reforms. far from all of that has been used for buybacks. she is a liar
John Raymond
John Raymond Apr 07, 2021 4:41PM ET
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she is a total liar. intel has just announced 20 bln new investment for two manufacturing facilities in arizona!
Forex Harbingers
Forex Harbingers Apr 07, 2021 3:34PM ET
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minimum corporate taxes won't do anything if the corporations can just write their taxes off with loopholes and offshore accts. This will only hurt Americans at the store. Companies will still make their profit targets each year.
Adrian White
Adrian White Apr 07, 2021 3:34PM ET
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Forex, I think you didn't understand what the idea of a "minimum tax"actually means. It's just the opposite of what you said. A minimum tax means no matter how many tax loopholes a company uses, they still AT LEAST have to pay the minimum tax.
Lawrenti Berija
Lawrenti Berija Apr 07, 2021 2:18PM ET
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every day an article featuring this crazy disgusting evil witch
AMG Ventures
AMG Ventures Apr 07, 2021 1:30PM ET
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buy bitcoin
stanley shalala
stanley shalala Apr 07, 2021 1:19PM ET
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Old man. Old policy.
Feren Nika
Feren Nika Apr 07, 2021 1:07PM ET
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minimum tax = rise tax to corporate. make a minimum price product. price product up again. you soft say it but price rise and inflation. dolar junk
Alan Rice
Alan Rice Apr 07, 2021 12:22PM ET
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Have a nice week Janet. Thankyou for Your Service.
Connecticut Yankee
A_Jaundiced_Eye Apr 07, 2021 12:15PM ET
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Of course, donations to the Democratic Party would be considered as "payment in lieu of taxes."
President Xi Jinping
President Xi Jinping Apr 07, 2021 11:54AM ET
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Its pretty clear that all the breaks and subsidies are going into ceo pockets, not trickling down. Sad, had the crooked corporations honored the system american middle class wouldnt be crushed
 
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