Yellen cites a "30-year race to the bottom" in which countries have slashed corporate tax rates to attract multinational companies. In comments on Monday, she also pledged that restoring U.S. multilateral leadership would strengthen the global economy and advance United States interests.
German finance minister Olaf Scholz and European Union economic affairs commissioner Paolo Gentiloni signalled their support for the overhaul on Tuesday.
Asked if raising the corporate tax rate to 28 percent from 21 percent would drive away corporations, Biden said: "Not at all. there's no evidence of that".
The Biden administration tax proposal also marks a USA return to years-long talks - led by the Organization for Economic Cooperation and Development with about 140 countries - to develop a global agreement on minimum levies.
"America first must never mean America alone", she said in her first major speech on its overseas economic policy.
She dropped a key demand in Trump-era negotiations over taxation of technology companies such as Alphabet Inc.'s Google and Facebook Inc., lifting a barrier that had raised transatlantic trade tensions and prevented an global deal combining minimum and digital tax issues. In mainland China, the standard corporate income tax rate is 25%, with several exceptions, mainly for hi-tech companies and enterprises engaged in pollution prevention, where even lower rates are applied, which makes the country an even more competitive environment in terms of taxation.
Yellen calls for global minimum corporate tax rate in first major address as Treasury secretary
With its much higher proposed rate for U.S. companies, Washington will be eager to ensure that the rate agreed internationally is as close as possible to its 21 per cent rate. France is gradually lowering its rates, with large corporations that have revenue over 250 million Euros (around 295 mln U.S. dollars) having to pay 31% in the fiscal year which started in January 2020, and 27.5% in 2021.
Irish banks used €500m in losses to cut corporatio.
The OECD has always been working on two-pillar global taxation scheme, originally meant mainly for digital giants like Google, Amazon, Facebook or Apple, to tax companies where they make profits even if they do not have a physical presence there.
During Donald Trump's presidency, the business-minded Republican slashed the USA rate from 35% - a global high - to 21%, arguing the previous rate put American companies at a global disadvantage and resulted in many of them moving their businesses overseas.
"The public coffers are empty due to the Corona crisis".
French Finance Minister Bruno Le Maire said Tuesday that he welcomed Ms. Yellen's proposal and that a global deal on cross-border taxation was within reach. "Now is the chance", he said.