Yellen Fields plans to raise U.S. corporate taxes that are “mutually beneficial”.
Janet Yellen has called on the American corporation to pay “infrastructure benefits” to pay for infrastructure spending, with President Joe Biden’s $ 2 million plan to provide a 1.6 percent increase in gross domestic product by 2024.
The U.S. Treasury Secretary made the remarks on Wednesday while the Biden administration is trying calm a reaction from business to recent economic package, which the government wants to work on more than $ 2 billion in the economy in tax increases on approximately $ 2.5 billion in corporations.
“America’s corporate tax system has long since broken down, so it’s also been a way of thinking about corporate taxes: tax reform isn’t a zero-sum game, with corporations on one side and government on the other,” Yellen told reporters. “There are policies that benefit each other. It’s a very used win-win phrase, but we’re facing a real one. “
The U.S. Treasury Secretary and former Fed chairman stressed that the revenue generated by corporate tax hikes would “become funding for traditional infrastructure, and the more modern types needed to drive the digital economy, like high-speed broadband networks.” Within four years, the plan would increase U.S. economic output by 1.6%, he said.
Yellen’s remarks appeared ahead of Biden’s speech on Wednesday in which the U.S. president will announce the benefits of the plan while the White House tries. gather momentum ahead of a tough set of congressional negotiations in the coming weeks.
There are a lot of Republicans and business groups that traditionally align with infrastructure spending corporate tax increases, saying they will prevent a recovery and make American multinationals more competitive. But it was repeated by senior Biden administration officials flexible on the details.
“There is room for compromise. That’s clear, ”Commerce Secretary Gina Raimondo and former Rhode Island governor told White House reporters.
“Our proposal is to invest in eight years and return more than 15,” he said. “Now, we can have a discussion about that. Should we pay more than 15 for more than 20? Isn’t the rate quite 28? Is it something lower?
“What we can’t do, and what I’m asking the business community not to do is say we like 28, we’re leaving, we’re not discussing,” he added. “That’s unacceptable. Come to the table and solve our problems to get a responsible responsible plan. ”
Asked about Raimondo’s comments, White House press secretary Jen Psaki said: “The debate is inevitable. Commitment is inevitable. Changes are certain, and our main result is a lack of opportunity.”
In a specific report, the U.S. Treasury said the proposal would raise the tax on U.S. corporations to 28 percent, and would impose a minimum tax of 15 percent on book revenue above any company’s regular tax liability.
Book income, which is the profit reported to investors, is often higher than the tax income reported to U.S. tax authorities. The minimum tax would apply to about 45 companies that earn more than $ 2 billion, increasing the tax liability by about $ 300 million, the Treasury said.
The Biden administration also wants to double the rate of taxing foreign profits from 10.5 percent to 21%, and wants to eliminate tax deductions required by companies that make payments to “related parties” in low-tax jurisdictions.
Officials added that companies will strengthen “anti-investment” rules that will allow companies to change their tax headquarters through M&A activity, and replace the Trump-era tax cut for exporters with new tax incentives to boost internal research and development.