Yellen bats for increased taxes for businesses

Summary

  • US Treasury Secretary Janet Yellen is all for increased taxes for businesses to aid stimulus package.
  • Yellen also called for stronger labour unions.
  • She said that the American Families Plan would be funded by increasing taxes on rich partially.

US Treasury Secretary Janet Yellen has categorically batted for increased taxes for businesses to aid stimulus package. She also advised for stronger labour unions and lowering barriers to foreign competition.

“With corporate taxes at a historical low of one percent of GDP, we believe the corporate sector can contribute to this effort by bearing its fair share: we propose simply to return the corporate tax toward historical norms,” she said in her speech at US Chamber of Commerce.

This, according to Ms Yellen, would help to “offset cost of public investments”.

She also said that the administration is seeking a global corporate minimum tax in a bid to stop companies from relocating to countries outside of America with lower tax rates.

“We want to eliminate incentives that reward corporations for moving their operations overseas and shifting profits to low-tax countries. As part of this effort, we are working with our international partners on a global minimum corporate tax to stop the race-to-the-bottom,” Ms Yellen said.

The Treasury Secretary also announced the government’s plan to tax the wealthy people more in a bid to finance the American Families Plan. “The American Families Plan will be paid for by a series of tax reforms that ensure that wealthy individuals are paying their fair share,” she added.

On the other hand, US Chamber of Commerce, the host of event, denounced the tax hike plan. “The data and evidence are clear: the proposed tax increases would greatly disadvantage US businesses and harm American workers. Now is not the time to raise new barriers to our fragile economic recovery,” Chamber’s CEO Suzanne Clark posted on twitter.

The speech by Ms Yellen is likely to see a reaction from Wall Street and markets across the globe.

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