US Tells OECD It Seeks A Global Minimum Company Tax Of 15% - Treasury

WASHINGTON (Pakistan Point News / Sputnik - 21st May, 2021) The United States has told the Organization for Economic Cooperation and Development (OECD) that it seeks a global company tax of at least 15 percent, the Treasury Department said Thursday as the Biden administration presses the group of developed countries to approve a minimum tax.

"Treasury proposed to the Steering Group that the global minimum tax rate should be at least 15 percent," the Treasury Department said in a statement, referring to the OECD panel that has been discussing the matter over the past two days. "Treasury underscored that 15 percent is a floor and that discussions should continue to be ambitious and push that rate higher."

The proposal comes as President Joe Biden demands that large US companies pay what he terms is "their fair share" and vows to crack down on those that employ complicated maneuvers to reduce or eliminate� tax obligations altogether by shifting income on paper between countries.

The Treasury Department said it is imperative to work multilaterally to end the pressures of corporate tax competition and corporate tax base erosion.

"Treasury reiterated that with the global corporate minimum tax functionally set at zero today, there has been a race to the bottom on corporate taxes, undermining the United States' and other countries' ability to raise the revenue needed to make critical investments," the statement said.

Some thousand big and mostly US corporations - including eBay, Google, Facebook, PayPal, microsoft, Yahoo, AOL, Twitter, Intel. Pfizer, Boston Scientific and Johnson & Johnson - have their tax base in Ireland to take advantage of corporate taxes there that stand at just 12.5 percent, compared with the US rate of 21 percent.

Some US companies also park their profits in tax havens to avoid paying any tax at all. California-based Applehas its tax base in the island of Jersey, which is located in the English Channel between England and France and pays no corporate tax.

In a related statement issued earlier Thursday, the Treasury said low tax collection "come at a cost to American households and compliant taxpayers as policymakers choose rising deficits, lower spending on necessary priorities, or further tax increases to compensate for the lost revenue."

US tax evasion could hit $7 trillion over the next decade unless the Internal Revenue Service invests tens of billions of Dollars to upgrade computer systems to detect underreporting of income, the Treasury Department added.

Biden has proposed ambitious multi-trillion Dollar spending plans on infrastructure and other development for an economy emerging from the coronavirus pandemic, and says it will be impossible for him to carry out those without higher taxes.

The Treasury Department's proposal appears to be a compromise on Biden's original idea for a global minimum corporate tax of 21 percent - the effective US rate now that he intends to raise to 28 percent.

Biden also intends to hike taxes for the richest Americans, proposing that the top marginal personal income tax of 37 percent be raised to 39.5 percent on households making $400,000 or more a year.��