
The new multilateral approach begins with the USA taking a leading role in working globally to find an appropriate minimum corporate tax, one of the revenue-raising proposals in President Joe Biden's $2.25 trillion package of infrastructure and other spending released last week.
Some tax experts say Canada can benefit from the US government's decision to join a campaign for the creation of a global minimum corporate tax rate for the world's major economies. It was lowered from 35% under President Donald Trump.
In her address to the Chicago Council, Yellen said a personal objective of her is to focus on America; worldwide engagements on fostering full legal rights and greater economic and education opportunities for women and girls, given the clear evidence that this will support inclusive economic growth more broadly.
During the week, she will meet with finance ministers to discuss climate change, finalize a boost to International Monetary Fund resources to help poor nations cope with Covid-19, Biden's "Made in America tax Plan", and attend bilateral meetings, including with her Canadian counterpart.
The second pillar of the OECD scheme is to establish a global minimum tax rate, which could apply to all companies, not only digital ones, so that governments do not compete with each other offering lower taxes to attract large multinational firms.
The EU's attempts to unify even what companies are taxed on, rather than setting a common tax rate, have been stalled since 2011 because taxation is a jealously guarded prerogative of national parliaments and often forms a key part of a country's economic model.
The new multilateral approach begins with the United States taking a leading role in working with Group of 20 nations to find an appropriate minimum corporate tax. The update provided few details, but said this move could generate $3.4-billion in revenue over five years.
Yellen calls for global minimum corporate tax rate in first major address as Treasury secretary
The corporate tax hikes in the US and Britain are being presented as an effort to raise billions in revenue to help offset the cost of pandemic-related support programs and stimulus spending.
According to Yellen, one of the outcome of an interconnected world has been a 30-year race to the bottom on corporate tax rates. Canada's corporate tax rate steadily declined during the period from 1980 to 2015, yet research found corporate tax revenues did not follow the same downward trend.
The average corporate income tax rate across 117 nations is 23.85%, according to the Tax Foundation, a think tank. But participants haven't yet reached a deal, and while most involved support the idea of a global minimum tax, the negotiations also include a potential accord on digital taxation that has been blocked by long-standing disagreements over how to approach the issue.
She said that for companies and economies to remain competitive it was important to "end the pressures of tax competition and corporate tax base erosion".
"We welcome the strong support from all G20 Finance Ministers for an agreement on both OECD pillars by July 2021", Ferrie said. "It is a big concern of ours".
However, the proposals could lead to a rift with traditionally lower-tax European Union members such as Ireland and Luxembourg - with extended haggling likely over where the minimum level is set.
UK to announce new international travel rules
A series of events will start this month, including soccer matches, comedy shows and marathon races. The government said today it won't lift the travel ban before May 17 - and maybe later.
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