The Biden administration appears to have just secured an international agreement.
Fox News reports that the Group of Seven (G7) has reached an agreement to impose a minimum corporate tax of at least 15 percent on multinational companies, which is in line with a policy supported by President Joe Biden.
The Group of Seven, which includes some of the world’s richest nations, reached the agreement on Saturday in London.
“G7 finance ministers today after years of discussion have reached a historic agreement to reform the global tax system, to make it fit for the global digital age and, crucially, to make sure that it’s fair so that the right companies pay the right taxes in the right places and that’s a huge prize for British taxpayers,” tweeted Rishi Sunak, Britain’s finance minister.
What the Group of Seven agreed to was to impose a tax rate of at least 15 percent on multinational corporations as well as to put in place measures that make sure that these corporations actually pay taxes in the countries where their business operates.
The purpose of this agreement is to address the problem that has been caused by countries competing with each for these giant corporations.
They have done so by offering these corporations massive tax breaks. The result has been that these corporations have been allowed, at times, to get away with paying little to no taxes, which, in turn, has meant that the countries where they operate have not been receiving any money from them.
This idea of imposing a 15 percent minimum global tax rate is one that President Biden has been pushing himself.
U.S. Treasury Secretary Janet Yellen was in attendance on Saturday, and she subsequently praised the agreement reached.
“The G7 Finance Ministers have made a significant, unprecedented commitment today that provides tremendous momentum toward achieving a robust global minimum tax rate of at least 15%,” Yellen said.
“The global minimum tax would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the U.S. and around the world,” she continued. “The global minimum tax would also help the global economy thrive, by leveling the playing field for businesses and encouraging countries to compete on positive bases, such as educating and training our workforces and investing in research and development and infrastructure.”
Now, Yellen and others are looking to expand this deal beyond just the Group of Seven. Bigger meetups, including more countries, are expected to take place this summer.