The main goal is to consolidate a public finance investment and support competitiveness. The United States of America is already sustaining several discussions with other members of the G20.
Janet Yellen, Secretary of the Treasury of the United States of America, plans to present a project to impulse a global minimum corporate tax. The initiative arises with the purpose of the financing part of the infrastructure mega-plan that President Joe Biden is promoting and needs a favorable international economic context.
According to Axios, one of the main fundaments of the project is that, through this international tax, companies could avoid moving or declaring their taxes in other countries with lower taxes or even tax-havens. In this way, both competitiveness and the flow to the public coffers would face an improvement.
Biden’s goal is to raise corporate taxes from the current 21% to 28% in the United States of America; once the Donald Trump administration began, the tax rate was 35%. Also, U.S companies will have to pay a 21% withholding of income from their activities abroad. This improvement might represent an increase of 9.5% in comparison to the current rate.
The Road to an International Minimum Tax for Companies
The Government is already in continuous discussion with other G20 countries to reach a final agreement on companies’ international minimum tax. Yellen’s mission is to convince ministers that big economies need to act together to avoid significant losses in other countries.
According to Axios, the announcement took place at the Chicago Council on Global Affairs, where Yellen stated that “the premise is that governments have tax systems that allow them to obtain revenue to finance investment in public goods and respond to crises.”
Yellen’s Position Regarding Bitcoin
The preferred alternative that governments have chosen to deal with the current financial crisis due to the Covid-19 pandemic has been the inorganic increase in monetary issuance. The consequent devaluation of national currencies has reinforced the reputation of bitcoin (BTC) as a store of value and a point of assistance against inflation.
The current Secretary of the Treasury has already spoken about the first cryptocurrency. In November 2020, after the news of Yellen’s appointment to her position went to the public, the economist’s low esteem for bitcoin (BTC) and crypto-assets, in general, came to light.
In public statements and several forums, the now American official made clear her position against the lack of stability in bitcoin and the large number of illicit operations that, according to her, cryptocurrencies allow.
However, she has recently been more open about cryptocurrency. In January 2021, Yellen talked to the Senate Finance Committee that cryptocurrencies about the capabilities of improvement in the financial system’s efficiency.” She also saw bitcoin as the potential asset to improve transactions on a global scale.
Janet Yellen, the senior official, said back in February that bitcoin may be an asset as well as an investment. Still, it will not become a means of payment because “it is very inefficient.”
By: Jenson Nuñez