Treasury Secretary Janet Yellen, speaking Tuesday at a U.S. Chamber of Commerce event, called for reform of the corporate tax system to help pay for infrastructure upgrades and other goals advanced by President Biden.
“We believe the corporate sector can contribute to this effort by bearing its fair share,” she said. “At the same time, we want to eliminate incentives that reward corporations for moving their operations overseas and shifting profits to low-tax countries.”
Ms. Yellen, speaking at the chamber’s online Global Forum on Economic Recovery, labeled corporate taxes as being at a “historical low” of 1% of gross domestic product as she argued the administration is seeking to return them to historic norms.
Corporate taxes as a share of GDP can be misleading because over time more U.S. business activity has shifted to forms taxed under the individual income tax system. Mr. Biden’s proposal calls for raising the corporate tax rate to 28% from 21%, a move that would push the U.S. from the middle of the pack among major economies to near the top.
“We are confident that the investments and tax proposals in the jobs plan, taken as a package, will enhance the net profitability of our corporations and improve their global competitiveness,” she said. “We hope that business leaders will see it this way and support the jobs plan.”
