Weather Ag News Portfolio DTN Renewable Fuels Futures Markets Markets Page Options Charts Quotes Oats/Barley News Grain
 St. Nazianz Milling LLC
  Home  
 
 
Printable Page Headline News   Return to Menu - Page 1 2 3 5 6 7 8 13
 
 
U.S. Congress a Hurdle for Global Tax  06/12 09:14

   President Joe Biden might have persuaded some of the world's largest 
economies to hike taxes on corporations, but the U.S. Congress could be a far 
tougher sell.

   (AP) -- President Joe Biden might have persuaded some of the world's largest 
economies to hike taxes on corporations, but the U.S. Congress could be a far 
tougher sell.

   White House press secretary Jen Psaki said Friday that leaders of the Group 
of Seven -- which also includes the United Kingdom, France, Canada, Germany, 
Italy and Japan -- agreed with Biden on placing a global minimum tax of at 
least 15% on large companies. The G-7 leaders, participating in a three-day 
summit in England, affirmed their finance ministers who earlier this month 
endorsed the global tax minimum.

   "America is rallying the world to make big multinational corporations pay 
their fair share so we can invest in our middle class at home," Jake Sullivan, 
the president's national security adviser, said Friday on Twitter.

   A minimum tax is supposed to halt an international race to the bottom for 
corporate taxation that has led multinational businesses to book their profits 
in countries with low tax rates. This enables them to avoid taxes and 
encourages countries to slash rates. The minimum rate would make it tougher for 
companies to avoid taxes, and could possibly supplant a digital services tax 
that many European nations are imposing on U.S. tech firms that pay at low 
rates.

   Biden administration officials believe the use of overseas tax havens has 
discouraged companies from investing domestically, at a cost to the middle 
class. The president hopes a G-7 endorsement can serve as a springboard for 
getting buy-in from the larger Group of 20 complement of nations.

   The agreement is not a finished deal, as the terms would need to be agreed 
upon by countries in the Organization for Economic Cooperation and Development 
and implemented by each of them. The president needs other countries to back a 
global minimum tax to ensure that his own plans for an enhanced one in the U.S. 
don't hurt American businesses.

   "It has the potential to stop the race to the bottom," said Thornton 
Matheson, a senior fellow at the Tax Policy Center. "It would be a huge sea 
change in the way things have been going in corporate taxes for the last three 
decades."

   The idea of an enhanced global minimum tax is also an integral part of 
Biden's domestic agenda, but it faces resistance in Congress.

   The president has proposed using a global minimum tax to help fund his 
sweeping infrastructure plan. His budget proposal estimates it could raise 
nearly $534 billion over 10 years, but Republicans say the tax code changes 
would make the United States less competitive in a global economy.

   Treasury Secretary Janet Yellen framed the agreement as a matter of basic 
fairness after the finance ministers' meeting.

   "We need to have stable tax systems that raise sufficient revenue to invest 
in essential public goods and respond to crises and ensure that all citizens 
and corporations fairly share the burden of financing government," she said.

   Texas Rep. Kevin Brady, top Republican on the House Ways and Means 
Committee, said GOP lawmakers would fight "tooth and nail" against the tax. 
Republicans view lower taxes as encouraging companies to invest and hire, 
putting little stock in Biden's argument that improved infrastructure and 
better-educated workers would help increase growth.

   "It is an economic surrender," Brady said Friday. "President Biden has 
managed to do the impossible -- he has made it better to be a foreign company 
and a foreign worker than an American company and an American worker."

   Senate Republican Leader Mitch McConnell of Kentucky has repeatedly said his 
party will oppose any measures that undo the 2017 tax cuts signed into law by 
President Donald Trump.

   The 2017 overhaul did create a new way to tax companies' foreign profits 
with what is known as "global intangible low-taxed income." Congressional 
Democrats said that framework encouraged firms to invest in foreign countries, 
instead of at home.

   Biden has proposed raising that rate to 21% among other changes to the code. 
The administration views the G-7's 15% as a floor rather than a ceiling for 
rates. But the G-7's plan varies from what Biden has proposed and there are 
details to be finalized, with tax experts noting that there appear to be gaps 
in rates and the treatment of assets such as buildings and equipment.

   Democrats want to dig into the fine print of any agreement before giving 
their full-throated approval of what comes out of the G-7, which means that 
Biden will have to keep making the sale to U.S. voters and their 
representatives.

   Senate Finance Committee Chairman Ron Wyden of Oregon favors the general 
idea of a global minimum tax. But Wyden said in a statement with House Ways and 
Means Committee Chairman Richard Neal of Massachusetts that they need to dig 
into the agreement to see if Americans would really benefit.

   "We are optimistic that a strong multilateral agreement can be reached to 
harmonize our international tax rules, end the race to the bottom and put a 
stop to digital services taxes," the two Democratic lawmakers said. "We look 
forward to working with the administration and evaluating the outcome of these 
negotiations for American workers, businesses and taxpayers."

 
 
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN