Biden administration is now negotiating a global minimum 15% corporate tax to fund his $2.2trillion infrastructure proposal - after initially saying it should be 21%

 The Treasury Department said it proposed a global minimum corporate tax rate of at least 15% during international tax negotiations on Thursday, backing down from its earlier call for a 21% minimum rate.

Treasury Secretary Janet Yellen first proposed a 21 percent global corporate minimum tax in April as part of President Joe Biden's $2.2 trillion infrastructure spending proposal.

Biden wants to pay for the American Jobs Plan by increasing the corporate tax rate to 28 percent from the current 21 percent. 

The average corporate tax around the world is 23.9. Most corporate tax rates in nations across the world, including all of the G7 and China, have a higher rate than 15 percent.

Many with rates as low as 0 include tax havens such as Bermuda and the Cayman Islands, which the Biden administration has targeted in his tax enforcement plans. 

Treasury Secretary Janet Yellen in the White House briefing room on May 7. The Treasury Department announced Thursday it was seeking a 15% minimum corporate tax rate
President Joe Biden wants to hike the U.S. corporate tax rate from a low during the Trump years to pay for his infrastructure plan

Treasury Secretary Janet Yellen in the White House briefing room on May 7. The Treasury Department announced Thursday it was seeking a 15% minimum corporate tax rate 

The Treasury Department said the proposal was made during a Organization for Economic Cooperation and Development tax steering group meeting on base erosion and profit shifting. 

'Treasury proposed to the steering group that the global minimum tax rate should be at least 15 percent,' the department said in a statement. 'Treasury underscored that 15 percent is a floor and that discussions should continue to be ambitious and push that rate higher.'

Some countries, notably France and Germany, backed the U.S. proposal for a minimum rate as high as 21 percent but other countries viewed that level as too high.

Previous OECD minimum tax discussions had centered around 12.5 percent - the same rate charged by Ireland.

The Treasury Department said officials from its Office of Tax Policy were 'heartened by the positive reception to its proposals and the unprecedented progress being made towards establishing a global minimum tax.'

It proposed the global minimum tax as a way to minimize the impact of a higher U.S. tax rate on the competitiveness of American companies and deter them from shifting operations or profits to lower-tax jurisdictions.

Yellen had said she wanted to stop a '30-year race to the bottom on corporate tax rates' at a time when governments have spent trillions of dollars on COVID-19 relief measures.

The Treasury Department said it made clear at the OECD meeting that a global minimum tax rate 'would ensure the global economy thrives based on a more level playing field.' 

On Wednesday, business leaders turned on Yellen for telling corporations to pay their fair share to help fund Biden's spending plans.

GOP leaders have bashed the plan for spending outside of 'traditional' infrastructure, with funds going to broadband and other programs.

The Chamber of Commerce, which hosted the event, pushed back, with President and CEO Suzanne Clark casting the proposed hike as inhibiting a fragile recovery.

She took over as CEO of the Chamber in March, succeeding longtime head Tom Donoghue.

'Now is certainly not the time to erect new barriers to economic recovery. The administration is right to champion infrastructure, and we want to be there with them to do that, but there are other ways to finance it,' she said. 

The Chamber has gotten behind past infrastructure proposals. In this year's talks, some Republicans have floated user fees, which Democrats are ruling out as regressive or not forcing companies to pay their 'fair share.'

She said the hike would 'greatly disadvantage' the U.S. in the global marketplace.

Yellen said the plan would be an economic win, on a day President Biden test drove a new electric Ford F-150 truck. 'The transition to a greener economy will provide a multi-decade boost to the economy, creating jobs along the way as the private sector participates in the development of new technologies, new investments, and the new products that will drive the global economic transformation,' she said.

The corporate tax rates across the world as of 2019

The corporate tax rates across the world as of 2019

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