The Biden administration proposed a minimum global corporate tax rate of 15%, but said it hoped world leaders would negotiate a more “ambitious” minimum rate.
Treasury Department officials proposed the 15% minimum corporate tax rate during an Organization for Economic Cooperation and Development (OECD) meeting on taxation Thursday. The meeting marked the initial discussions over a global minimum rate between nations after the Treasury Department had previously pushed for such a tax to stop the global “race to the bottom.”
“Treasury proposed to the Steering Group that the global minimum tax rate should be at least 15%,” the department said in a statement Thursday. “Treasury underscored that 15% is a floor and that discussions should continue to be ambitious and push that rate higher.”
U.S. officials argued that the international “tax architecture” must be stabilized and that the global playing field must be fair during the meeting, the department said. Ensuring multinational corporations are taxed fairly worldwide will spur innovation and help working class people, it added.
“Treasury was heartened by the positive reception to its proposals and the unprecedented progress being made towards establishing a global corporate minimum tax,” the statement continued. (RELATED: Biden Administration Calls For Global Minimum Corporate Tax Rate)
“We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom,” Yellen said during a speech last month. “Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth, and prosperity.”
French and German officials, meanwhile, signaled support for the U.S. proposal after the OECD meeting, according to Reuters. They said the 15% rate is a good compromise and “big progress.”
“The 15% rate is certainly more realistic given where other countries are,” Manal Corwin, head of the KPMG Washington National Tax group, told Reuters.
President Joe Biden unveiled his $2 trillion infrastructure plan in March, which would largely be funded by hiking the U.S. corporate tax rate to 28%. The Tax Cuts and Jobs Act of 2017 lowered the corporate tax rate from 35% to 21%.
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