At a speech delivered at the Chicago Council on Global Affairs, she stressed that one of the consequences of economic globalization has been a “30-year race to the bottom on corporate tax rates."
Currently, however, it is important to ensure "stable tax systems that raise sufficient revenues in essential public goods and respond to crises, and that all citizens fairly share the burden of financing the government," she added.
The Treasury secretary also noted that President Joe Biden has an ambitious infrastructure plan, which calls for raising the corporate tax rate from 21 to 28 percent.
Multinationals shifted around $1 trillion in profits to tax havens in 2016, which resulted in up to $300 billion in global tax revenue losses that mostly hurt low-income countries, according to a new study.
"It is important to work with other countries to be able to end the pressures of tax competition and the erosion of the tax base by businesses," she said.
For years, the Organization for Economic Cooperation and Development (OECD) has been trying to establish a new global tax system adapted to large multinationals. Its proposal includes the universalization of a minimum corporate tax rate.
Yellen’s remarks on taxation came a day before the spring meeting of the International Monetary Fund (IMF) and the World Bank, an event that will discuss the global tax initiative.