Politics IMF warns global tax deal 'urgently needed' to avoid potential trade war
Biden's corporate tax plan takes aim at income inequality
WASHINGTON (AP) — From John Kennedy to Ronald Reagan to Donald Trump, American presidents have taken aim at corporate America's tax-avoidance schemes before — and mostly missed. Now, President Joe Biden is training the government’s sights again on the loopholes, shelters and international havens that have long allowed multinational companies to dodge taxes in ways that ordinary households cannot. The idea is twofold: First, to help pay for Biden's trillions in proposed spending — for everything from roads and bridges and green energy to internet access, job training, preschool and sick leave.
The International Monetary Fund (IMF) warned Tuesday that a global tax deal is "urgently needed" in order to avoid a potential trade war.
"We are particularly optimistic for a global agreement on corporate income taxation in 2021," IMF Managing Director Kristalina Georgieva said on Tuesday, Bloomberg .
"And it is urgently needed to avoid, down the road, the risk of spiraling into a chaotic tax or trade war where everyone loses," Georgieva added.
The IMF threw its support behind a proposal by President Biden in April to implement a minimum corporate global tax rate.
Fair tax systems are vital for strong climate action
This year should be the year in which the struggles for climate justice, economic justice and tax justice converge. Many of the countries that participated in the Biden Leaders Summit on Climate are also at the negotiating table to agree on new global corporate tax rules being hashed out at the OECD. Several important countries such as France and Germany have reacted warmly to the U.S. global tax proposals.It's time for all government and corporate leaders pushing for real climate action to understand that fair taxes are a critical part of the solution.
"The IMF has been calling for a minimum global corporate income tax rate as a way to interrupt the race to the bottom in corporate income taxation," IMF Fiscal Affairs Director Vitor Gaspar .
Speaking to The Wall Street Journal on Tuesday, Treasury Secretary Janet Yellen reiterated that she was working with other countries to end a "global corporate tax race to the bottom."
"I fear that this race to the bottom globally with respect to corporate taxes is depriving countries of the revenue that they really need to invest in infrastructure, education, R&D, and other things that spur growth and also impact corporate competitiveness," she said.
Republicans have criticized Biden's plan to raise corporate taxes to pay for his infrastructure plan, arguing it would make the U.S. less competitive and drive companies overseas.
Georgieva said Tuesday that the coronavirus and climate change could be an opportunity for the international community to come together and work on the international tax system.
The IMF said in April that 2021 was on pace for record global economic growth after last year's hit from the coronavirus.
5 winners and 3 losers from President Biden’s first congressional address .
Winner: Obamacare. Loser: Wall Street.“After just 100 days — I can report to the nation: America is on the move again,” Biden said during his speech. “Turning peril into possibility. Crisis into opportunity. Setback into strength.