President Biden on Monday defended his push to raise corporate taxes to pay for higher infrastructure spending, while Treasury Secretary Janet Yellen made the case for a global minimum tax that would prevent U.S. companies from moving overseas to avoid higher taxes at home.
The president, returning to Washington from a weekend at Camp David, told reporters he’s “not at all” worried that a higher tax rate will drive companies out of the U.S.
“There’s no evidence of that,” Mr. Biden said. “You’re talking about companies in the Fortune 500 that haven’t paid a single penny in tax for three years. Come on man.”
Ms. Yellen on Monday called for global coordination on an international tax rate that would apply to multinational corporations regardless of where their headquarters are located. She said such a global tax could halt the “thirty-year race to the bottom” in which countries have competed against each other by lowering their corporate tax rates, as the U.S. did under President Trump.
“Competitiveness is about more than how U.S.-headquartered companies fare against other companies in global merger and acquisition bids,” Ms. Yellen told the Chicago Council on Global Affairs. “It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government.”
She said Mr. Biden understands “it is important to work with other countries to end the pressures of tax competition and corporate tax base erosion.”
“We are working with G-20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom,” she said. “Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth, and prosperity.”
The president wants to raise the corporate tax rate from 21% to 28 percent, to help pay for his $2.25 trillion infrastructure plan.
“I’m going to push as hard as I can, to compete with the rest of the world,” Mr. Biden said Monday. “Everybody else in the rest of the world is investing billions and billions of dollars in infrastructure and we’re going to do it here.”
Congressional Republicans oppose the plan. Mr. Biden criticized them as hypocritical, saying they favored infrastructure spending before he became president.
“When the Republicans put forward an infrastructure plan, they thought everything from broadband to other things were worth paying for infrastructure,” Mr. Biden said. “They know we need it.”
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