Accountancy Slice

North America

Treasury Secretary Janet Yellen appeared before the House Ways and Means Committee on Tuesday, in a four-and-a-half hour hearing which saw her insist that President Joe Biden would keep his promise to not raise taxes on Americans who earn less than $400,000 a year if he wins a second term. “The president has been very clear that no family earning less than $400,000 will face a tax hike,” Ms. Yellen said. “He has not proposed such a thing since he took office, and he’s not proposing to allow that to happen when parts of the Tax Cuts and Jobs Act expire." Asked by Representative Michelle Fischbach (R-MN) how Mr. Biden would find a way to keep the tax cuts from expiring, Ms. Yellen said the president would work to let the cuts for the rich lapse while preserving the rest. “There will be a negotiation over what to do when these tax cuts expire and the president, as he does in many other situations, will negotiate with Congress,” she added. During the hearing, Ms. Yellen also defended a global corporate tax deal against accusations that it would siphon away U.S. revenues and said she was working to carve out an allowance for the U.S. R&D tax credit. The so-called Pillar 2 agreement for a 15% global minimum tax is aimed at halting a downward spiral of competitive corporate tax cuts by countries to attract investment and the shifting of profits to their jurisdictions by multinational firms. She argued that U.S. firms "did just fine" when the U.S. had the sole global minimum tax of 10.5% and other countries had none.