U.S. Treasury Secretary Janet Yellen speaks during a news conference after attending the G7 finance ministers meeting at Winfield House in London, England, June 5, 2021. (Justin Tallis/Pool via Reuters)
Janet Yellen celebrated a recent G7 tax agreement as a win for “the middle class and working people in the U.S.” In reality, the scheme to establish a minimum global corporate-tax rate would transfer revenues from the U.S. treasury to foreign governments while putting American businesses at a disadvantage in international markets.
At the heart of the current drive for a global tax system is the fact that President Biden is pushing $4 trillion worth of spending plans at a time of record debt. Because suburbanites are now a core part of the Democratic coalition, there could be severe political ramifications to forcing the upper middle class to pay for too much of his agenda. The lowest-hanging fruit from a revenue and political standpoint is to hike corporate taxes. But Yellen recognizes that, under the current system, raising corporate-tax rates risks making the U.S. uncompetitive. Thus, she’s determined to create some sort of global corporate-tax system to reduce the incentive for multinational companies to seek