On July 1st, the Biden Administration proposed a global minimum corporate tax rate of at least 15%.
This would tax corporations and fund investments in infrastructure and social services. With that proposed policy, 130 countries agreed to back it. This was announced by Treasury Secretary Janet Yellen and the Organization for Economic Cooperation and Development (OECD). This tax implementation was aimed at hitting online giant businesses (Forbes).
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“The framework updates key elements of the century-old international tax system, which is no longer fit for purpose in a globalized and digitalized 21st-century economy,” said the OECD. “The OECD said it expects the plan to be finalized in October and said it has the potential to raise $150 billion in extra tax revenue every year.” The tax has the potential of raising $150 billion that will be used for infrastructure and social services globally.
Yellen said that lower rates deprived countries of money when it came to infrastructure, education, and efforts to fight during the pandemic. “Countries led by France have already started imposing unilateral digital taxes aimed at U.S. tech giants such as Amazon, Google and Facebook; under the deal, they would agree to withdraw those taxes, regarded as unfair trade practices by the U.S., in favor of the global approach” (Goshen News). Taxing the rich is an idea that became more prevalent in 2020.
Though Biden has plans globally with the tax structure, he also wants to take action with it in America too. He said, “We must adopt the global minimum tax…to make sure corporations pay their fair share. Congress should pass my Made in America tax plan to bring good paying jobs home and make sure our tax code works for families, workers, and small businesses, not just profitable corporations and billionaires.”