By David Lawder
WASHINGTON (Reuters) – Treasury Secretary Janet Yellen said on Tuesday that the United States is in talks with other countries to carve out an allowance for the U.S. research and development tax credit as part of the 15% global minimum tax deal.
“We are negotiating with other countries right now to try to get favorable treatment for the R&D tax credit and I am hopeful these negotiations will be successful,” Yellen said during a hearing before lawmakers in the House of Representatives.
Yellen told members of the House Ways and Means Committee that she will keep them informed of negotiations on this and another pillar of the Organisation for Economic Cooperation and Development (OECD) tax deal that covers a redistribution of taxing rights on large, highly profitable companies.
Yellen rejected repeated accusations from Republican Congress members that the global minimum tax would put American companies at a disadvantage and said that over the long term, adoption of both pillars of the OECD deal would likely be slightly revenue positive, while reducing distortions.
She said the “Pillar 2” agreement for a 15% global minimum tax is “very much in support of goals that are good for this country.”
She said that U.S. companies “did just fine” when the U.S. had the sole global minimum tax of 10.5% and other countries had none, but all countries adopting a 15% tax would discourage companies to try to attract investment with lower tax rates.
Yellen also reiterated President Joe Biden’s pledge not to raise taxes on American households earning less than $400,000 per year.
(Reporting by David Lawder; writing by Lindsay Dunsmuir; editing by Jonathan Oatis)
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