Janet Yellen, the US Treasury chief, has called for the introduction of a new global minimum corporate tax rate.
In an address at the Chicago Council on Global Affairs, she claimed that the rate would put an end to the “race to the bottom”, where companies offshore their accounts to countries with increasingly low tax rates.
According to Yellen, the US is working alongside G20 nations to introduce the measure aimed at curtailing large companies setting up in nations, such as Ireland, where the corporate tax rate is comparatively low to other countries.
Yellen said: “Competitiveness is about more than how US-headquartered companies fare against other companies in global merger and acquisition bids.
“It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government.”
She added: “Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth, and prosperity.”
The move, alongside efforts to end offshoring profits, is intended to raise $2tn in 15 years to fund Biden’s infrastructure plan.