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Global Minimum Tax Would ‘End the Race to the Bottom,’ Yellen Says

Janet L. Yellen, the Treasury secretary, said a minimum tax for corporations would improve global economic conditions and encourage countries to compete on positive bases, like infrastructure. G7 leaders agreed on Saturday to back a global corporate tax rate of at least 15 percent.

“For too long, there has been a global race to the bottom in corporate taxes, where countries compete by lowering their tax rates instead of the well-being of their citizens and natural environments. The G7 has taken significant steps this weekend to end the existing harmful dynamic, making commitments today that provide tremendous momentum towards achieving a robust global minimum tax at a rate of at least 15 percent. That global minimum tax would end the race to the bottom in corporate taxation and ensure fairness for the middle class and working people in the U.S. and around the world. The global minimum tax would also help the global economy thrive by leveling the playing field for businesses and encouraging countries to compete on positive bases such as educating and training our workforces, and investing in research and development and infrastructure.” Reporter: “The French wanted to target Amazon and Facebook. What impact does today’s deal have on companies like those?” “It will include large, profitable firms and those firms, I believe, will qualify by almost any definition. And essentially what we have agreed is that we will reallocate taxing rights for a portion of the excess or residual profits of those companies to jurisdictions where they have market activity on the basis of the distribution of that activity. And so, that is intended to replace an approach that focused on just a few U.S. digital giants. And the agreement is that this new approach will replace an approach that we found objectionable, that targeted large, successful U.S. digital firms.”

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International video coverage from The New York Times.

International video coverage from The New York Times.



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