U.S. Treasury Secretary Janet Yellen supports a global minimum tax rate for all businesses. This should prevent companies from going to places where they have to pay lower taxes. He said this in his first keynote address since taking office at the end of January.
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OECD has been discussing tax synchronization for many years, especially in the field of corporate taxation. Of course, all of this is intended to prevent companies from taking advantage of large differences in national tax laws. The government of President Joe Biden plans to raise the corporate tax rate from 21 to 28 percent. This can be avoided by US companies taking action or, if necessary, transferring their accounts to low-tax countries. I think that’s the background, ‘says PNR housing economist Hon de Zhang.
But how feasible is the plan? There are smaller countries that could benefit from these differences in taxes. We hear Yellen say, “We tax, so governments can make the necessary spending.” ‘The strategy of many small countries is to compete in the tax sector and thus generate sustainable government revenue. That list belongs to the Netherlands. In such a discussion it is very quickly discussed that a level playground should be created. A lot has to be said for that. On the other hand, we must also realize that there is no one-level playground because there are huge differences between countries. Some countries are blessed with rich natural resources, while others are not at all. A country like the United States has a large population. This gives you a very energetic housing market. So, I’m not surprised that some countries are trying to use the tax system as a place of residence. Those countries will oppose this. ‘
When Donald Trump launched the trade war against China, there was a lot of resentment in many parts of the world and among Democrats within the United States. ‘You see now that Democrats accept that policy substantially, but they follow a different tone. In Yellen’s words, America has changed from America to America alone. Donald Trump is very upset about traditional allies. It’s not smart. The tone of the Biden government will certainly be different. The content of the policy will be more or less the same, but the tone and strategy behind it will change. The United States will certainly try to get Europe more firm in the fight against China. ‘
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