Treasury Secretary hopes Congress will pass global minimum tax in budget reconciliation
Senate Republicans argue that a treaty would have to be ratified by a two-thirds Senate majority to enact the global tax rate in the U.S.
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Treasury Secretary Janet Yellen said Sunday that she believes Congress will pass the global corporate minimum tax approved by 136 countries last week in the $3.5 trillion budget reconciliation bill.
"I am confident that what we need to do to come into compliance with the minimum tax will be included in a reconciliation package," Yellen told ABC News. "I hope that we -- that it will be passed and we will be able to reassure the world that the United States will do its part."
On Friday, 136 countries agreed to setting a 15% minimum global tax rate for big corporations and to make it harder for them to avoid the tax, The Epoch Times reported. President Biden lauded the plan after it was announced, saying in a statement that "a strong global minimum tax will finally even the playing field for American workers and taxpayers, along with the rest of the world.
"Secretary Yellen and the rest of my administration have rallied more than 130 countries representing more than 90% of the world's GDP to bring us one step closer to finally ending that race to the bottom, to ensure that profitable corporations pay their fair share, and provide governments with the resources to invest in their workers and economies," the statement continued.
Senate Republicans argue that the minimum tax would have to be ratified as an international tax treaty by a two-thirds majority of the Senate.
In a letter to Yellen, Sen. Mike Crapo (R-Idaho), Sen. James Risch (R-Idaho), and Sen. Pat Toomey (R-Pa.) wrote, "we are extremely concerned with the Administration's recent suggestions it is considering circumventing the Senate's constitutional treaty authority."
"At last week's Senate Banking Committee hearing, you indicated the Administration was considering alternative means for significantly modifying existing bilateral tax treaties that would bypass Senate treaty approval," the letter continued.
The senators argued, "Implementing this agreement without a multilateral treaty would also subject U.S. companies to double taxation and tax uncertainty, ultimately giving their foreign counterparts a significant competitive advantage."
Both Crapo and Rep. Kevin Brady (R-Texas) criticized the global tax, saying that the Biden administration "used this global forum to advance its short-sighted domestic tax agenda," according to The Hill.
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