Biden Administration Lauds International Agreement on 15% Minimum Corporate TaxJoel B. Pollak 8 Oct 2021
The Biden Administration celebrated an international agreement among 130 countries on Friday to accept a minimum corporate tax rate of 15%. The idea is to prevent a “race to the bottom” that encourages companies to move offshore.
President Donald Trump and the Republicans had included a provision called “Global Intangible Low-Taxed Income” (GILTI) in the 2017 Tax Cuts and Jobs Act, aimed at preventing American companies from fleeing to tax havens. It required U.S. companies to pay a tax rate of 10.5% on profits earned in a foreign country if that country’s tax rate was too low.
But Biden and Secretary of the Treasury Janet Yellen pushed for a global agreement on a minimum corporate tax rate, reviving negotiations that had begun years earlier. Their goal was to make foreign taxes on corporations even higher, so Democrats in Congress could raise taxes on American businesses without fear of chasing them away to low-tax countries.
Though roughly 130 countries had already agreed to the Biden administration’s proposal several months ago, there were several holdouts, notably Ireland, a tax haven for American companies, which agreed Thursday to raise its corporate tax rate from 12.5% to 15%. Some critics say that the 2023 deadline for implementation is too soon; the deal would require the U.S. to raise its tax on overseas profits, which could face political opposition in Congress. Others say that the deal has “no teeth,” given that there are still many countries that have declined to join the deal and could entice businesses with lower rates.
The amount of money lost to governments worldwide every year due to tax havens is estimated at just $245 billion — a small fraction of the amount that the Biden Administration wants Congress to raise to pay for trillions of dollars in new spending.
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https://www.breitbart.com/economy/2021/10/08/biden-administration-lauds-international-agreement-on-15-minimum-corporate-tax/
