Treasury officials Itai Grinberg and Rebecca Kisser, who lead the global negotiations for the United States, argued in an essay last week That at a rate of 21 percent, “jobs and investment can flourish in the United States.”
After a virtual meeting with her counterparts from the Group of 7 countries last week, Treasury Secretary Janet L. Yellen said the higher rates would “generate funds for continued growth in education, research and significant investments in clean energy.”
More details about those plans are expected to be unveiled in early and mid-October. However, it is unclear when and how the United States will implement that part of the agreement, known as Pillar 1, and concerns remain among business groups and Republicans that US companies will bear the brunt of the new taxes. .
The October deadline has been self-imposed, and may be pushed back. Countries aim to fully activate the agreement by 2023, as it will take time for countries to change their tax laws.
The House resolution, set by the Democrats on the Ways and Means Committee, may still undergo substantial changes before the final vote. It would eventually have to be combined with a proposal from Senate Democrats, who have yet to settle on a tax rate for corporate foreign income.
Manal Corwin, a Treasury official in the Obama administration who now heads the Washington national tax practice at KPMG, said it’s possible the rate could still be higher, despite pushback from companies.
“You never know how these things work when they need more revenue,” Ms Corwin said.
Any change could come with an adjustment to the House Democrats’ proposal for domestic corporate tax rates. Despite Biden’s call for 28 percent, the House has proposed a graduate structure ranging from 18 percent for small businesses with incomes less than $400,000 to 26.5 percent for companies with taxable income of more than $5 million.