ROME — President Joe Biden and other world leaders are endorsing a global corporate minimum tax at Saturday’s G-20 summit, a monumental agreement that U.S. officials are hoping will lead to an increase in revenue to fund Biden’s Build Back Better agenda.
While finance representatives from most G-20 countries have already agreed to implement a 15 percent minimum tax on corporations — ending a race to the bottom on corporate taxation that could keep companies from leaving the U.S. for low-tax countries — heads of state will formally endorse the plan on Saturday, according to a senior Biden administration official.
A final endorsement of the new tax was expected to be included in the joint communique, the statement that G-20 leaders issue at the end of the summit outlining their priorities and actions they agreed to take. Each country will then have to go through their own process to ratify the tax.
The corporate tax, Covid, climate change and spiking energy prices are expected to be high on the agenda during the opening session of the G-20. The Biden official called the global corporate minimum tax a “game changer” that would remove “incentives of the offshoring of American jobs” and would lead to at least $60 billion in additional revenue every year in the U.S. alone.
In opening remarks on Saturday at La Nuvola, where the summit is taking place, Italian Prime Minister Mario Draghi emphasized the need to come together to tackle some of the world’s most complex challenges.
“From the pandemic to climate change to fair and equitable taxation, going it alone is simply not an option,” Draghi said. “We must do all we can to overcome our differences. And we must rekindle the spirit that led to the creation of this group.”
Biden and other G-20 leaders posed for a group photo before sitting down for the meeting. First responders joined, and several of them took selfies with Biden at the end.
Biden was seen briefly interacting with Turkish President Recep Tayyip Erdogan and British Prime Minister Boris Johnson.
Draghi cautioned the group in his opening remarks that the pandemic was far from over and that more must be done to combat global vaccine inequality.
“In high income countries, more than 70 percent of the population has received at least one dose. In the poorest ones, this percentage drops to roughly 3 percent,” he said. “These differences are morally unacceptable and undermine the global recovery.”
Biden will also pressure major oil producers to ramp up production capacity as energy prices are surging in the U.S. and in Europe, leading to a sharp increase in the cost of gas and electricity for consumers.
“This president is pursuing a foreign policy for the middle class and tomorrow will be an example of what that’s all about,” the Biden official said.
The Group of 20, an annual gathering of international leaders representing the world’s biggest economies, meets every year to discuss some of the world’s most challenging economic problems.
In addition to the United States, the G-20, which was founded in 1999 following a series of global economic crises, includes Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey and members of the European Union.
Combined, member countries make up roughly 80 percent of global GDP and 60 percent of the world population, although some of the most populous countries — such as Pakistan and Nigeria — are not part of the G-20.
In the afternoon, Biden is expected to meet on the sidelines of the G-20 with British Prime Minister Boris Johnson, French President Emmanuel Macron and German Chancellor Angela Merkel to discuss reviving the 2015 nuclear deal with Iran, known as the Joint Comprehensive Plan of Action, or JCPOA.
Last week Iran’s top nuclear negotiator said Tehran was ready to begin negotiations before the end of November.
In the 2015 deal, widely viewed as the biggest foreign policy achievement of the Obama administration, Iran agreed to stop pursuing the development of nuclear weapons and to allow for international checks on its facilities in exchange for an agreement from the U.S. to roll back sanctions.
Since then-President Donald Trump withdrew from the pact in 2018 and reimposed crippling economic sanctions, Iran has begun enriching uranium to 60 percent purity, near weapons-grade, and has denied inspectors access into some nuclear sites. Iran has also been unable to access tens of billions of dollars of its assets due to U.S. sanctions, which has squeezed its economy.
The president and first lady Jill Biden were also expected to attend a gala dinner Saturday evening with other heads of state at the Quirinale Palace, one of the three official residences of the Italian president.