Biden Calls for Global Tax Hike So US Businesses Can't Escape Corporate Tax Rate
No escape for American businesses
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Biden Treasury Secretary Janet Yellen is about to call for a minimum corporate tax rate which, in effect, would prevent American companies from relocating offshore to escape the forthcoming tax hikes, according to reports.
Axios reported that "by trying to convince other countries to impose a global minimum tax, Yellen is acknowledging the risks to the American economy if it acts alone in raising corporate rates."
The Biden administration proposed initiating the largest tax hike in almost 30 years to fund Biden's $2 trillion American Jobs Act, slated to pay for America's "infrastructure."
But the hike would also finance progressive policy initiatives such as climate research, free education, and green energy.
The changes would raise the country's corporate tax rate from 21% to 28%.
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But the move would be devastating for the American middle class.
Yellen is expected to push for all other industrialized nations to raise their corporate tax rates to a minimum standard.
The hike would allegedly ensure economic "competitiveness" worldwide.
But Yellen will reportedly argue that the tax rate minimum ensures that those foreign countries have enough revenue to maintain their own governments.
"Competitiveness is about more than how U.S.-headquartered companies fare against other companies in global merger and acquisition bids," the secretary plans to say, according to an excerpt of her prepared remarks obtained by Axios.
"It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government."
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"We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom," she will state.
Under President Donald Trump, the U.S. tax rate was slashed from 35% to 21%, arguing the previous rate put American companies at a globals distant age.
Neon Nettle reported last week that Biden's tax hike would be even higher than what Communist China charges American businesses.
If the increase is passed into law, it would be bigger than China’s corporate tax rate of 25 percent.
According to the Washington Post:
“The proposal would also increase the global minimum tax paid from about 13 percent to 21 percent, as well as other measures aimed at taxing corporations that shelter profits offshore to avoid taxes.”
The Tax Foundation conducted an analysis to determine what would happen if the rate increased from 21 percent to 28 percent and a 15 percent minimum tax “on the book income” for big companies was introduced.
The Tax Foundation estimates that 159,000 jobs would be lost due to the hike in the long term, along with wages and economic output taking a slight hit.
