“Yellen calls for minimum global corporate income tax” – Looks to partially offset Biden’s proposed corporate tax increase
With chatter from Senator Mitch McConnell (R – KY) on President Biden’s second stimulus plan, Treasury Secretary Janet Yellen proposed in her virtual remarks to the Chicago Council on Global Affairs, a creative, perhaps aggressive, plan to adopt a global minimum corporate income tax. Secretary Yellen references the “30-year race to the bottom” during which countries around the globe continually reduced corporate taxes to entice multinational corporations to locate in their respective countries. Secretary Yellen proposed that the Biden administration would work with the Group of 20 advanced economies to set a global corporate minimum tax.
Secretary Yellen stated that “Competitiveness is about more than how U.S.-headquartered companies fare against other companies in global merger and acquisition bids. It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods.”
“How the world’s largest economies are expected to recover from the pandemic”
While the global economy is recovering from the COVID-19 pandemic faster than before, that recovery is not evenly distributed but results primarily from the United States’ ramp-up in vaccinations. The International Monetary Fund (IMF) issued a warning on Tuesday that the uneven distribution of vaccines and vaccinations threatens to leave developing countries woefully behind.
Notwithstanding its warning, the IMF stated that it was upgrading its economic global forecast, believing that the expected increase in vaccinations of hundreds of millions of people will “fuel a sharp rebound in economic activity.” With that assessment, the IMF now expects that the global economy will not surpass its last 5.5% increase and reach a 6% global economic expansion.
“Even with high uncertainty about the path of the pandemic, a way out of this health and economic crisis is increasingly visible,” Gita Gopinath, the IMF’s chief economist, said in a statement accompanying the fund’s World Economic Outlook report.
The IMF estimates that the economic fallout from the pandemic could have been three times worse if not for the $16 trillion of worldwide fiscal support. Optimistic projections notwithstanding, without continued ramping up of global vaccinations and economic support from wealthier nations, there remain daunting challenges to a full recovery
