Thompson Reuters reported that Treasury Secretary Janet Yellen was urging for congress to consider the plan from the Organization for Economic Cooperation and Development (OECD) early this month. She was making these pleas via tweeter!
In early September she tweeted, "As Congress begins to finalize their legislation, I urge them to remember the historic opportunity that we have to end the race to the bottom and finally have a foreign policy and a tax code that works for the middle class."
Biden’s “Made in America Tax Plan,” would overhaul the US international tax rules yet again with the intent of making US companies more competitive by in part, eliminating incentives to offshore investment by instituting a 15% “minimum book tax.”
The Biden plan appears to align with the OECD plan in its intent to tackle Multinational Companies using income sourcing and tax jurisdiction rules across the globe to minimize their overall effective tax rate. The purported objective of the plan is to ensure that such enterprises pay their “fair share,” of tax wherever they operate.
One of the specific targets in the plan is digital companies. The OECD plan would reallocate the taxing jurisdiction from just their home countries to where they are conducting business and are earning profits. This would divorce the tax jurisdiction from being tied to simple physical presence.
The plan also calls for a “Global minimum corporate tax,” that would prevent erosion of a countries tax base by companies establishing their taxability in lower taxed jurisdictions. This appeared to be the intention behind the last major US tax act, that overhauled the international tax regime (Tax Cuts and Jobs Act passed December 2017) installing the Global Intangible Low Taxed Income regime. However, that complicated bit of tax legislation didn’t seem to quite hit the mark. We’ll see if this latest plan promoted via tweet can get there.