WORLD US Republicans vow to oppose Yellen's G7 tax deal, casting doubt on its future

WORLD

US Republicans vow to oppose Yellen's G7 tax deal, casting doubt on its future

CGTN

15:04, June 08, 2021

U.S. Treasury Secretary Janet Yellen speaks during a news conference, after attending the G7 finance ministers meeting, at Winfield House in London, UK, June 5, 2021. (Photo: Reuters)

Several top U.S. Senate Republicans on Monday rejected Treasury Secretary Janet Yellen's G7 deal to impose a global minimum corporate tax and allow more countries to tax big multinational firms, raising questions about the U.S. ability to implement a broader global agreement.

The opposition from Republicans may push U.S. President Joe Biden to attempt to use budget procedures to pass the initiatives with only Democratic votes.

It left lawyers and tax experts in Washington wondering whether it could get done without crafting a new international treaty, which requires approval by a two-thirds majority in the evenly split 100-member Senate.

"It's wrong for the United States," Republican Senator John Barrasso said of the tax deal struck on Saturday by finance ministers from the G7 wealthy democracies.

"I think it's going to be anti-competitive, anti-U.S., harmful for us as we try to continue to grow the economy and certainly at a time when we're coming out of a pandemic," Barrasso, who chairs the Senate Republican Conference, told reporters at the U.S. Capitol.

In the landmark agreement, G7 finance ministers agreed to pursue a global minimum tax rate of at least 15 percent and to allow market countries to tax up to 20 percent of the excess profits - above a 10 percent margin - of around 100 large, high-profit companies.

Yellen said the "significant, unprecedented commitment" would end what she called a race to the bottom on global taxation.

In exchange, G7 countries agreed to end digital services taxes, but the timing for that is dependent on the new rules being implemented.

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