World leaders are expected to approve plans for a global minimum tax on corporations on Saturday, the first day of the G-20 summit, senior Biden administration officials said.
The purpose of the policy is to prevent companies from jumping from country to country in search of lower tax rates, an approach dubbed by US Treasury Secretary Janet Yellen “race to the bottom”.
“It’s a game change for American workers, taxpayers and businesses,” said one senior official, who asked for anonymity before the announcement. “In our judgment, this is more than just a tax deal. It is about reshaping the rules of the world economy. “
The deal will encourage President Biden, who has been pushing for such an agreement since taking office. It is unclear whether he will be able to push politics through a heavily divided Congress. Republicans oppose any tax increases, and some moderate Democrats are wary of such measures.
Biden will have a busy first day at the summit, bringing together world leaders to discuss economic and other issues. The president will meet with British Prime Minister Boris Johnson, German Chancellor Angela Merkel and French President Emmanuel Macron, with whom Biden had a side line ahead of the summit on Friday to discuss how to continue negotiations with Iran on its nuclear program.
Although President Obama reached an international agreement to prevent Tehran from building a nuclear bomb, President Trump withdrew from the pact.
Biden has been pushing for a new agreement, and talks are set to begin in Vienna in November.