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Janet Yellen in Washington, D.C., U.S., on Friday, March 26, 2021. Photographer: Erin Scott/Bloomberg via Getty Images

Janet Yellen will use her first major address as Treasury secretary to argue for a global minimum corporate tax rate, Axios has learned, as she makes the case for President Biden’s plan to raise U.S. corporate taxes to fund his $2 trillion+ infrastructure plan.

Why it matters: Convincing other countries to impose a global minimum tax would reduce the likelihood of companies relocating offshore, as Biden seeks to increase the corporate rate from 21% to 28%.

  • “Competitiveness is about more than how U.S.-headquartered companies fare against other companies in global merger and acquisition bids,” Yellen will say today in a speech to the Chicago Council on Global Affairs, according to an excerpt of her prepared remarks obtained by Axios.
  • "It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government."
  • "We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom."

The big picture: President Trump lowered the U.S. rate from 35% to 21%, arguing that U.S. companies were at a global disadvantage and were being incentivized to relocate offshore.

  • The average corporate rate in the G7 is 24%, with some nine countries recently lowering their corporate rate, according to the Tax Foundation, a conservative tax group.
  • Biden’s plan would also raise the international minimum rate for foreign profits from U.S. companies from 10.5% to 21%, which would still be lower than the 28% domestic corporate rate.

Driving the news: Biden has tapped five Cabinet secretaries to explain — and sell — his plan to the American public, including Transportation Secretary Pete Buttigieg, Energy Secretary Jennifer Granholm, Housing and Urban Development Secretary Marcia Fudge, Labor Secretary Marty Walsh and Commerce Secretary Gina Raimondo.

  • Yellen’s task is to make the international case. Her speech also is designed to set the tone for the annual spring International Monetary Fund and World Bank meetings in Washington, which will begin virtually this week.

Between the lines: Biden has been relying on Yellen to convince the business community and reassure Wall Street that his $2 trillion+ infrastructure proposal, on top of his $1.9 trillion stimulus package, won’t lead to inflation.

  • Now he’s deploying her to convince international finance ministers and central bankers that the world’s biggest economies need to act in concert on corporate rates to avoid a race to the bottom.

Go deeper: Yellen will also challenge the world’s economic powers to focus on climate change and on ways to improve vaccine access for the world’s poorest countries.

  • She will call for $650 billion in new “Special Drawing Rights” — essentially lines of credit at the IMF that can help developing countries access more U.S. dollars.
  • The Trump administration was skeptical of new SDR allocations and many congressional Republicans are still opposed.

The bottom line: By trying to convince other countries to impose a global minimum tax, Yellen is acknowledging the risks to the American economy if it acts alone in raising corporate rates.

  • “Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth, and prosperity,” she will say.

Go deeper

Column / Harder Line

In uneven economic recovery, climate action risks leaving some behind

Illustration: Aïda Amer/Axios

A year ago, almost all of us were grappling with the unknowns of the pandemic. Today, some of us are doing just fine, while others are still reeling.

Why it matters: This split-screen economy, called a K-shaped recovery, highlights the risk facing politicians, including President Biden, as they rally around bold climate action. If new climate laws aren’t inclusive of those less well off in America and around the world, they risk exacerbating inequality.

Updated 6 hours ago - World

Biden in call with Netanyahu raises concerns about civilian casualties in Gaza

Photo: Ahmad Gharabli/Nicholas Kamm/Getty Images

President Biden spoke to Israeli Prime Minister Benjamin Netanyahu Saturday and raised concerns about civilian casualties in Gaza and the bombing of the building that housed AP and other media offices, according to Israeli officials.

The big picture: At least 140 Palestinians, including dozens of children, have been killed in Gaza since fighting between Israel and Hamas began Monday, according to Palestinian health officials. Nine people, including two children, have been killed by Hamas rockets in Israel.

Updated 6 hours ago - Politics & Policy

"Horrified": AP, Al Jazeera condemn Israel's bombing of their offices in Gaza

A ball of fire erupts from the Jalaa Tower as it is destroyed in an Israeli airstrike in Gaza. Photo: Majdi Fathi/NurPhoto via Getty Images

The Associated Press and Al Jazeera on Saturday condemned the Israeli airstrike that destroyed a high-rise building in Gaza that housed their and other media offices.

What they're saying: The White House, meanwhile, said it had "communicated directly to the Israelis that ensuring the safety and security of journalists and independent media is a paramount responsibility," according to press secretary Jen Psaki.