The Biden administration is pushing for a global minimum tax to be set at 21% – a much higher rate than initially proposed by the OECD – to eliminate international tax competition as his administration is advocating for a massive increase of the domestic corporate income tax rate.
The Biden administration will tax American companies at a higher rate at home and also allow foreign nations to tax U.S. companies abroad.
Now traditionally low-tax countries like Hungary who favor tax competition, are attacking Biden’s plan. The Hungarian state secretary for tax affairs Norbert Izer said:
“The concept violates states’ financial sovereignty and attempts to reverse the progress of those countries that have made serious efforts to introduce lower taxes.”
Hungary’s nine percent corporate tax rate is the lowest in the European Union and highly competitive for businesses.
Izer also said that “Hungary will not consent to any solution that makes life more difficult for local businesses or reduces the financial sovereignty of the Hungarian state.”
The fact that the European Union who is attacking American companies with Digital Services Taxes, fines, and regulations is backing Biden’s proposal is a clear sign of how bad the consequences of the Biden plan will be for American businesses and the American worker.