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Minimum global corporate tax is a treaty and requires Congressional approval-Tim Philips

Kitco News

Pushing a global minimum tax rate is a high priority for the Biden Administration as it seeks to raise taxes in the U.S. to fund its social spending programs, said Tim Phillips, President of Americans for Prosperity.

Phillips spoke to Michelle Makori, editor-in-chief of Kitco News at the FreedomFest 2021 in Rapid City, South Dakota. 

Treasury Secretary Janet Yellen announced in early July, that so far 130 countries around the world have agreed to a global minimum tax rate. The administration claims this would end the practice of global corporations seeking out low-tax jurisdictions to move their headquarters out of the U.S.

Philips contends that given it is an international agreement it should be passed through Congress first.

“The global minimum tax rate should be considered a treaty and that means that the Senate would have to approve it”, Phillips explained. "I don't think there would be any support for it in the Senate. But there was troubling precedent with the Paris Climate Accord and the Iranian nuclear agreement which was never ratified by the Senate," Phillips said.

Phillips is however concerned that Congress may be by-passed “The Paris climate treaty, which was a treaty originally was signed by Obama, and the Senate was clearly going to reject it,so he made it into an accord, which is the same thing as a treaty. You just call it an accord. Obama approved it unilaterally which gets dangerously close to the American executive branch being Imperial.”

Included in the Biden Administration’s infrastructure bill is a plan to hike the corporate tax rate to 25% or 28%. .A global minimum tax rate of 15% would be less damaging to America’s competitiveness on the world stage and has been promoted by Treasury Secretary Janet Yellen and approved by the G20.

The aim is for world leaders to finalize the deal at an October summit in Rome.

"What a loss of freedom for the people in those individual countries. This is an idea from a lot of elites that they know best," Phillips said. "It is a terrible idea. Every country should decide for itself."

For Tim Phillips’ full interview including how Americans For Prosperity is leading a campaign against wasteful government spending watch the video above. Follow Michelle Makori on Twitter: 
@MichelleMakori.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.