Business & Economy

Biden hails global minimum corporate tax as victory for American workers

Washington, Oct 8 (EFE).- The president of the United States on Friday hailed an agreement to establish a global minimum corporate tax rate of 15 percent, calling it a victory for American workers.

The deal was the result of negotiations led by the Paris-based Organization for Economic Co-operation and Development.

“Today’s agreement shows how American leadership and diplomacy is advancing the economic interests of American working families,” Joe Biden said in a statement.

Friday’s tax accord encompasses 136 countries and jurisdictions that account for more than 90 percent of global gross domestic product, or nearly all of the 140 countries that took part in the negotiations, the OECD, a Paris-based inter-governmental organization, said.

Developing countries Kenya, Nigeria, Sri Lanka and Pakistan are the last remaining holdouts.

The deal comes after years of international negotiations aimed at preventing large corporations from using tax havens to avoid paying higher taxes.

It was reached after the Biden administration revived talks that had stalled in the latter stages of Donald Trump’s presidency.

“Establishing, for the first time in history, a strong global minimum tax will finally even the playing field for American workers and taxpayers, along with the rest of the world,” Biden said.

The deal will “bring us one step closer to finally ending that race to the bottom,” Biden said, referring to countries’ efforts to attract corporations to their jurisdictions with low tax rates.

It will “ensure that profitable corporations pay their fair share and provide governments with the resources to invest in their workers and economies,” the president added.

Biden said the existing global tax system for decades has “rewarded multinational corporations for shipping jobs and profits overseas.” American workers and taxpayers have “paid the price” for that system, one that also has left many US allies at a competitive disadvantage, according to the Democratic head of state.

The president also called once again on the US Congress to approve his administration’s $1 trillion infrastructure plan and a tax, climate and social spending package with an even bigger price tag.

That latter bill once was expected to cost as much as $3.5 trillion over a decade, but Biden has said it will need to be lowered due to objections from more conservative Democrats in the Senate.

The US president said his Build Back Better agenda will build on Friday’s global agreement and “eliminate incentives to shift jobs and profits abroad,” referring to his administration’s and Democrats’ criticisms of Trump’s 2017 tax law.

Treasury Secretary Janet Yellen also hailed the global accord and said that once it is implemented two years from now it will be much easier for Americans to “land a job, earn a living or scale a business.”

“Rather than competing on our ability to offer low corporate rates, America will now compete on the skills of our workers and our capacity to innovate, which is a race we can win,” she said in a statement.

The global accord is to be finalized at the Oct. 30-31 G20 summit in Rome and take effect in 2023. EFE


Related Articles

Back to top button