The Biden Administration celebrated an international agreement among 130 countries on Friday to accept a minimum corporate tax rate of 15%. The idea is to prevent a “race to the bottom” that encourages companies to move offshore.
President Donald Trump and the Republicans had included a provision called “Global Intangible Low-Taxed Income” (GILTI) in the 2017 Tax Cuts and Jobs Act, aimed at preventing American companies from fleeing to tax havens. It required U.S. companies to pay a tax rate of 10.5% on profits earned in a foreign country if that country’s tax rate was too low.
But Biden and Secretary of the Treasury Janet Yellen pushed for a global agreement on a minimum corporate tax rate, reviving negotiations that had begun years