Yellen: “30 Year Race To The Bottom On Corporate Tax Rates” Must End With Global Minimum Tax

  • In an effort to end what she called the “30-year race to the bottom on corporate tax rates,” U.S. Treasury Secretary Janet Yellen on Monday urged her counterparts at The Chicago Council on Global Affairs to join her in embracing a global minimum tax aimed at preventing companies from shifting profits by offshoring.
  • The proliferation of so-called “tax havens” around the world in recent years contributed to the sharp decline in the average global corporate tax rate—which has fallen from around 40% in 1980 to 24% today—as countries adjusted their rates downward to either attract multinationals or prevent companies from seeking to stash their profits elsewhere.
  • Yellen argued in a speech that the “pressures of tax competition” are eroding corporate tax bases across the world, undermining nations’ efforts to establish “stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises.” Yellen vowed to work with G20 nations to “agree to a global minimum corporate tax rate that can stop the race to the bottom.”

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