The finance ministers from the Group of Seven nations agreed over the weekend to support a global minimum tax rate of 15 percent on multinational corporations and give countries more authority to tax wealthy digital companies like Apple, Facebook, and Google that contribute little in taxes to some countries where they do business.
U.S. Treasury Secretary Janet Yellen and her G-7 peers hailed the agreement as a return to multilateralism and a blow against tax havens. Yellen said the G-7 took "significant steps" to end a "race to the bottom" on corporate taxes and "ensure fairness for the middle class and working people in the U.S. and around the world."
The next step for President Biden and his global minimum tax allies is to get buy-in from the Group of 20 finance ministers when they meet in Vienna in early July, then a group of 135 countries in the so-called Inclusive Framework.
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"We'll have to convince the other great powers, especially the Asian ones — I am thinking in particular of China," French Finance Minister Bruno Le Maire said over the weekend. "Let's face it, it's going to be a tough fight. I am optimistic that we will win it because the G-7 is giving us extremely powerful political momentum."
Many governments are "likely to wait and see what others, especially a divided U.S. Congress, will do," The Wall Street Journal reports. "In countries with parliamentary systems, governments can quickly deliver on pledges, turning them into local laws and regulations. In the U.S., however, a slim Democratic majority in the House, an evenly split Senate, anti-tax Republicans, and procedural hurdles complicate passage. Other countries may be reluctant to change their laws or remove taxes that hit U.S.-based tech companies without seeing Congress move first."
