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Yellen pledges U.S. international cooperation, calls for global minimum tax

EconomyApr 05, 2021 02:41PM ET
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© Reuters. FILE PHOTO: FILE PHOTO: U.S. President-elect Joe Biden announces members of his economic policy team in Wilmington, Delaware

By David Lawder

(Reuters) -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 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.

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.

NEW ATTITUDE

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.

Mnuchin had routinely opposed any climate change references in G20 and other communiques issued from large multilateral gatherings.

Yellen also has dropped https://www.reuters.com/article/us-g20-usa-oecd/u-s-drops-safe-harbor-demand-raising-hopes-for-global-tax-deal-idUSKBN2AQ2E6 a key Mnuchin demand from international tax negotiations -- a provision that would allow large U.S. technology companies opt out of any new rules on taxation of digital services.

PRESSURE ON TAX HAVENS

The new Treasury chief said it was important to "end the pressures of tax competition" and make sure governments "have stable tax systems that raise sufficient revenues in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government."

Separately, a U.S. Treasury official told reporters that it was important to have the world's major economies on board with a global minimum tax to make it effective, but did not say how many countries were needed for this.

The official said the United States would use its own tax legislation to prevent companies from shifting profits or residency to tax haven countries and would encourage other major economies to do the same.

The Biden plan proposes a 21% minimum corporate tax rate, coupled with eliminating exemptions on income from countries that do not enact a minimum tax. The administration says the plan will discourage the shifting of jobs and profits overseas.

Yellen said in her remarks that while advanced economies had successfully supported their economies through the COVID-19 pandemic, it was too early to declare victory, and more support was needed for low income countries to gain access to vaccines.

She also said the Biden administration will defend human rights and added that the U.S. economic relationship with China "will be competitive where it should be, collaborative where it can be and adversarial where it must be."

Yellen pledges U.S. international cooperation, calls for global minimum tax
 

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Comments (31)
jonathan seagull
jonathan seagull Apr 05, 2021 9:48PM ET
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She is still dreaming that the world would obey viscious evangelism. Those daus are gone forever.
Shirley Gohner
Shirley Gohner Apr 05, 2021 9:48PM ET
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Just think..... the above comment passed approval of Investing.com moderators?
Imre Magossy
Imre Magossy Apr 05, 2021 9:20PM ET
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I am dreaming for 1$=100Huf.
Klaus Weyers
Klaus Weyers Apr 05, 2021 5:34PM ET
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welcome to socialism.. goodbye free markets
Joel Schwartz
Joel Schwartz Apr 05, 2021 5:34PM ET
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The markets haven’t been free since 1913 when the FED was created.
Randy Randy
randy00 Apr 05, 2021 4:27PM ET
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Countries are a terrible idea.
Ivann Lian
Ivann Lian Apr 05, 2021 4:23PM ET
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Mudah mudahan dunia bisa terselamatkan dari para perampok bajak laut bermuka pembodohan. Dimana definisi kesetaraan ras berada?
Klaus Weyers
Klaus Weyers Apr 05, 2021 4:23PM ET
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english would be nice
Benjamin McIntire
Benjamin McIntire Apr 05, 2021 4:18PM ET
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Best idea in decades. Some uneducated masses will protest since their brainwashing triggers them hard whenever they hesr the word “tax”.
danny Levine
danny Levine Apr 05, 2021 4:18PM ET
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you can support it, but just don't say it's the "best idea in decades". that just makes you look like a cloown
James Pattison
James Pattison Apr 05, 2021 2:25PM ET
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Doctor Yellen on the pandemic... next do climate change... her policies will ceash the world economy
Trader 009
Trader 009 Apr 05, 2021 2:25PM ET
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Global tax treated to fit with US policy.....GOOD LUCK
David David
David9 Apr 05, 2021 2:00PM ET
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Tax is a country's internal affair. Different countries have different tax system so making everyone pay the same does not make sense... plus tax is consider as a country's internal affairs... it is never good for us to meddle in someone's internal affair...
Trevor Roberts
LimitUp Apr 05, 2021 1:36PM ET
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We are just getting warmed up
Shirley Gohner
Shirley Gohner Apr 05, 2021 1:20PM ET
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Loved this line from Commisar Yellin -----> "...and that all citizens fairly share the burden of financing government." Huh?  50% of people in the US pay NO federal income tax!
Ivan Radusic
Castor8888 Apr 05, 2021 1:19PM ET
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The time of the world's policeman has passed !!!
Ivo Wagner
Ivo Wagner Apr 05, 2021 12:50PM ET
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This is hilarious!!!!!
ben sc
ben sc Apr 05, 2021 12:45PM ET
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Any chance India, Russia, or China will agree to higher taxes so that Biden can fund his deficit spending for social programming? The US Treasury should be extremely embarrassed about having to attempt to sell this garbage to a global audience. Janet Yellen, starring in the Death of the Salesman(woman or nonbinary other).
Marco cuevas
Marco cuevas Apr 05, 2021 12:44PM ET
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TAX THE RICH...it's a democrats world baby.
Shirley Gohner
Shirley Gohner Apr 05, 2021 12:44PM ET
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Have another drink...
Casador Del Oso
Casador Del Oso Apr 05, 2021 12:40PM ET
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You go Janet! I will be loading up on XOUT once the SP500 hits 2200. A once in a lifetime opportunity.
Alan Rice
Alan Rice Apr 05, 2021 12:23PM ET
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Janet's SMART !!
CHEAH KENG WEI
CHEAH KENG WEI Apr 05, 2021 12:03PM ET
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US is like a robber keep printing money like free at the expenses of other countries.
Diddl One
Diddl One Apr 05, 2021 11:25AM ET
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It would be a first that the US ever cared about the economy of other countries. Sorry, wrong, when it suits we do. This is about to make sure that they can keep increasing tax for their social welfare and inclusiveness. No point looking for better conditions if you pay the same everywhere. And I guess the FED will than also be put in charge of the worlds combined tax revenue to distribute as the US sees fit? After MAGA comes MAGE: Make America Global Everywhere.
danny Levine
danny Levine Apr 05, 2021 10:11AM ET
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lol more taxes and more money printing, this bodes so well for the consumers
David David
David9 Apr 05, 2021 9:20AM ET
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Tax is another country's internal affair... why we always want our hands in another's business?
Picaso Fish
Picaso_Fish Apr 05, 2021 9:20AM ET
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You are clueless, the united states is close to default. All they want is the ability to pay there bills without other countries stealing there lunch. Your certainly no patriot!
Juan Chacon
Juan Chacon Apr 05, 2021 9:20AM ET
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their, you're*.... what a patriot you are.
Juan San
Juan San Apr 05, 2021 9:19AM ET
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Yes, because we all know that a minimum corporate tax hurts companies, and not the cost of goods/services.
David JC
David JC Apr 05, 2021 9:17AM ET
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More taxes!!! Oh goody. Perhaps try taxing consumption and not personal income...unfortunately this may never happen.
Picaso Fish
Picaso_Fish Apr 05, 2021 9:17AM ET
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But then you would pay even more tax :( .... If you tax corpirations at least they can then consume and grow tax free.
Picaso Fish
Picaso_Fish Apr 05, 2021 9:17AM ET
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When you run an corporation you choose when you pay tax vs growth
American Truth
American Truth Apr 05, 2021 8:19AM ET
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These globalists want to tax the world, not just americans. Other countries will agree but not implement, same as with the biggest scam "climate change", and americans will continue to take it up the *****
Josh Davis
Josh Davis Apr 05, 2021 8:19AM ET
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More true than you know
Steve Lora
Steve Lora Apr 05, 2021 8:15AM ET
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Granny Yellen is going to make enemies trying to shake countries down. Biden cant do anything if they refuse to pay anyway
Eudon Hickey
Eudon Hickey Apr 05, 2021 8:07AM ET
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Yellen should only talk about the USA, as the Chinese already pointed out- you are not qualified to speak about any other country.
 
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