The Treasury Department on Thursday said it has proposed a global minimum corporate tax rate of at least 15 percent after meeting with officials from other countries as part of international tax negotiations.
“Treasury underscored that 15% is a floor and that discussions should continue to be ambitious and push that rate higher,” the department said in a statement. “Treasury was heartened by the positive reception to its proposals and the unprecedented progress being made towards establishing a global corporate minimum tax.”
There is currently no global minimum tax rate.
The OECD, a group of industrialized countries, has been discussing international tax issues, including a global minimum corporate rate. The Biden administration has been emphasizing the international negotiations as it seeks to raise U.S. taxes on multinational corporations to pay for infrastructure investments.
President Biden has proposed raising the corporate tax rate from 21 percent to 28 percent, and has called for increasing a U.S. minimum tax on multinationals’ foreign earnings to 21 percent. Critics of Biden’s proposals argue that they will make the U.S. less competitive compared to other countries that have recently cut their corporate rates.
Treasury Secretary Janet Yellen has said that establishing a global minimum tax rate could help to end a “race to the bottom” on corporate taxes and help ensure countries are able to raise sufficient revenue to provide public services.
Treasury said that talks with OECD countries about a global minimum tax rate “began in earnest” during meetings over the last two days.
“Treasury made clear that a global corporate minimum tax rate would ensure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and would spur innovation, growth, and prosperity while improving fairness for middle class and working people,” the department said.
The Group of 20, a separate entity but one that overlaps in membership with the OECD, has set a goal of reaching an agreement on international tax issues by July.