Treasury Secretary Janet Yellen may push G-20 finance ministers during a meeting in Venice, Italy, this week for a global minimum tax rate above the 15% threshold agreed to by 130 nations last week, U.S. Treasury officials said Tuesday.
The officials said during a call with reporters that the 15% floor could be raised in the forthcoming negotiations after the G-20 finance minister meeting in Venice. A rate decision is not expected until future meetings between members of the Paris-based Organization of Economic Cooperation and Development, the officials said.
Yellen is slated to meet with G20 counterparts and attend the Venice International Conference on Climate on July 11. From there, she will travel to Brussels to meet with European Union counterparts and the Eurogroup "to discuss U.S. policy priorities and respective efforts to support the economic recovery," the Treasury said.
The meeting comes just one week after a groundbreaking agreement between 130 OECD countries for a conceptual framework to overhaul the global tax system, including a minimum rate of at least 15% on multinational corporations, regardless of where they operate.
The minimum global corporate tax rate is intended to eradicate certain tax havens that allow multinational companies to shield their profit, while giving smaller countries more tax revenue from bigger firms. Yellen has said a global tax, which would apply to companies' overseas profits, would eliminate what she's described as a "global race to the bottom" in terms of corporate taxes.
Corporations employ a litany of tactics to reduce their tax liability, often by shifting profits, and revenues, to low-tax countries such as Bermuda, the Cayman Islands or Ireland, regardless of where the sale was made. The practice by American and foreign multinationals costs the U.S. tens of billions of dollars each year, according to the Treasury Department.
The OECD has pushed for years to eliminate corporate strategies that "that exploit gaps and mismatches in tax rules to avoid paying tax." The global minimum tax would apply to companies' foreign earnings, meaning that countries could still establish their own corporate tax rate at home.
The Biden administration is separately pushing to raise the U.S. corporate tax rate to 28% from 21% – reversing part of Republicans' 2017 tax law – to help pay for a sweeping plan that would dramatically expand the government-funded social safety net.
Democrats are planning to include that tax hike, along with higher levies on wealthy Americans, in a multitrillion-dollar package that they hope to pass later this year using a procedural tool known as budget reconciliation, which allows them to bypass a 60-vote filibuster by Republicans.
Yellen plans to tell G-20 finance ministers that Democrats will also include global minimum tax language in the reconciliation bill, as well as language that removes tax deductions for U.S. companies located in countries with a lower minimum rate than here.
FOX Business' Edward Lawrence contributed to this report