Janet Yellen has stated that she is sure that Congress would approve a crucial component of the global corporation tax agreement reached by 136 countries last week as part of the multitrillion-dollar economic legislation being negotiated by the White House and Democratic senators.
“I am confident that what we need to do to come into compliance with the minimum tax will be included in a reconciliation package,” the US Treasury secretary told ABC on Sunday. “I hope . . . that it will be passed and we will be able to reassure the world that the United States will do its part”.
Yellen's statements come after the OECD brokered a ground-breaking change of global corporate tax regulations in an effort to eliminate tax havens while raking in an additional $150 billion from multinational corporations.
The agreement contains a 15% global minimum effective corporate tax rate, as well as new rules requiring multinational corporations to declare profits and pay more in the nations where they do business.
However, crucial aspects of the agreement, such as the 15% global minimum tax, require congressional approval in the United States. Democratic squabbles over Biden's domestic spending plans have brought this approval into question. The White House and Democratic leaders on Capitol Hill are hoping to reach an agreement on Biden's spending proposals and tax increases by the end of the month, but such an accord is far from certain.
On Sunday, Yellen stated that the "historic" global tax agreement will "put an end to what has been a decades-long race to the bottom on corporate taxation, when countries try to slash their taxes to recruit our industries, making it more difficult to keep jobs in the United States."
On Sunday, Treasury Secretary Janet Yellen said she believed Democrats will "come together and do what's necessary" to approve the spending and tax measure, which Republicans reject and will need to pass both chambers of Congress with Democratic votes alone.
Biden and many Democrats had previously hoped for a $3.5 trillion spending package focused on extending investments in child care, education, and healthcare. However, due to opposition from moderate members of the party, they are discussing reducing the size of the package to around $2 trillion over a decade.