The Lead: Global Corporate Tax
The leaders of the Group of Seven, or G7, have reached an agreement to set a minimum corporate tax rate of 15%. This was a major wish for the Biden Administration, namely, to stop the “race-to-the-bottom.”
The U.S. and U.K. have been losing businesses to countries with the lowest corporate tax rate. They had been asking other nations to agree to a minimum rate to level the playing field. The rate would apply to businesses in Canada, France, Germany, Italy, Japan, the U.S. and the UK.
G7 leaders will meet later this week. When a formal tax agreement is reached, it will set the stage for the 135 other countries that will meet for the G20 in July to follow suit.
Even though a global agreement was what President Biden and Treasury Secretary Janet Yellen wanted, 15% was not their ideal number. The U.S. was hoping for a minimum rate of 21% but that was never going to fly.