Leaders of the world’s largest economies support the establishment of a global minimum tax at the opening of the Group of 20 (G-20) summit in Rome on Saturday.
The global minimum tax seeks to block companies from moving jobs or profits abroad to avoid paying taxes. President BidenJoe BidenOvernight Energy & Environment – American Clean Power – Supreme Court to review power plant case Harris makes one last pitch for McAuliffe Overnight Health Care – Presented by Altria – Young children one step closer to vaccine MORE and his administration pushed the deal across the finish line for the past many months.
“We reached a historic agreement on a fairer and more efficient international tax system,” Italian Prime Minister Mario Draghi said at the opening of the summit on Saturday.
The agreement would set a global minimum corporate tax rate of 15 percent, which administration officials say will generate $ 60 billion or more in additional revenue annually in the United States alone.
“The agreement works because it removes the incentives for offshoring American jobs, it will help small businesses compete on equal terms, and it will give us more resources to invest in our people at home,” a senior administration official said. told reporters during a call showing the message.
“It’s a game changer for American workers, taxpayers and businesses,” the senior official added. “And in our view, this is more than just a tax deal; it’s a transformation of the rules of the global economy.”
The corporation minimum tax has received support from Democrats in Congress, and Biden has included it in its framework for a sweeping $ 1.75 trillion in climate and social spending as a revenue increase. The bill, however, must still pass Congress; Biden had hoped to see movement on it before traveling to Europe, but fell short.
The global minimum tax had been approved by the G-20’s finance ministers earlier this year, but Saturday’s session represents for the first time that countries’ leaders will join the deal. The announcement was expected, but nonetheless represented a significant development.
The Organization for Economic Co-operation and Development announced earlier this month that 136 countries had signed the global minimum corporate tax framework. The minimum tax will apply to companies with revenues in excess of 750 million euros and are estimated to raise $ 150 billion annually in revenue.
By supporting the agreement on Saturday, G-20 leaders are committed to implementing the agreement by 2023.
Minister of Finance Janet YellenJanet Louise YellenOn The Money – Big Business Wins in Build Back Better Yellen says spending bills would lower inflation, reduce household costs Start Less: How Democrats Can Win Big on Small Business MORE praised the “historic” deal in a statement issued later Saturday.
“This agreement will transform the global economy into a more prosperous place for American companies and workers,” Yellen said. “Instead of competing on our ability to offer lower prices, America will now compete on our people’s skills, our ideas and our ability to innovate – which is a race we can win.”
After the first plenary session ended, a senior administration official said Biden “stressed the importance of this historic agreement during his intervention” and stressed that the countries can tackle common interests despite other disagreements.
The meeting also touched on the coronavirus pandemic and the energy markets.
“The President underlined his commitment to end the global pandemic and ensure an inclusive global economic recovery, including by supporting developing countries through debt relief and strengthening the redistribution of SDRs,” the senior official said. “He reminded G20 leaders that new pandemics could occur at any time, so it is important that we strengthen global health systems and do more to create the global health security infrastructure to ensure we are prepared for the next pandemic. “
“The President stressed the need for balanced, well-supplied and competitive global energy markets so that we do not undermine this critical moment of economic recovery,” the senior official said.
Updated at 11:39