Treasury Secretary Janet Yellen Calls for Reform of Corporate Tax System -- Update
May 18 2021 - 10:38AM
Dow Jones News
By John McCormick
Treasury Secretary Janet Yellen, speaking Tuesday at a U.S.
Chamber of Commerce event, called for reform of the corporate tax
system to help pay for infrastructure upgrades and other goals
advanced by President Biden.
"We believe the corporate sector can contribute to this effort
by bearing its fair share," she said. "At the same time, we want to
eliminate incentives that reward corporations for moving their
operations overseas and shifting profits to low-tax countries."
Ms. Yellen, speaking at the chamber's online Global Forum on
Economic Recovery, labeled corporate taxes as being at a
"historical low" of 1% of gross domestic product as she argued the
administration is seeking to return them to historic norms.
Mr. Biden's proposal calls for raising the corporate tax rate to
28% from 21%, a move that would push the U.S. from the middle of
the pack among major economies to near the top.
"We are confident that the investments and tax proposals in the
jobs plan, taken as a package, will enhance the net profitability
of our corporations and improve their global competitiveness," she
said. "We hope that business leaders will see it this way and
support the jobs plan."
Ms. Yellen also said that the nation needs to reorient its
fiscal policy.
"We haven't maintained our infrastructure let alone modernized
it," she said. "We haven't sufficiently supported public research
and development to ensure that America will maintain its
technological edge. We haven't embraced the investments in
education and training that we need to keep up with technological
change and to compete in the international marketplace as we once
did."
Ms. Yellen repeated her call for a global minimum corporate tax
to "stop the race to the bottom."
If the U.S. raises its tax rates and imposes higher burdens on
foreign profits of U.S. companies, a global minimum tax would help
prevent companies based in other countries from having a potential
advantage.
Suzanne Clark, the chamber's chief executive, provided an
immediate rebuttal after Ms. Yellen spoke.
"It's always an honor to hear from the Treasury secretary,
including, and maybe even especially, when we disagree, as we do on
taxes," she said. "The data and the evidence are clear: The
proposed tax increases would greatly disadvantage U.S. businesses
and harm American workers and now is certainly not the time to
erect new barriers to economic recovery."
Ms. Clark said the administration is correct to champion
infrastructure but the chamber disagrees with the need to raise
corporate taxes to finance the spending. "We want to be there with
them to do that, but there are other ways to finance it," she
said.
Write to John McCormick at mccormick.john@wsj.com
(END) Dow Jones Newswires
May 18, 2021 10:23 ET (14:23 GMT)
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