The IMF Chief Economist said that different corporate tax rates around the world have fueled tax shifting and avoidance, leading to a competition amongst countries that have seen corporations take advantage of countries desperation.

Yellen urged the 20 largest economies to “stop the race to the bottom” by setting a new minimum that would allow governments more stability in collecting tax revenue. The Biden administration is targeting a 21% global minimum tax for U.S. multinational corporations.

“That reduces the revenues that governments collect to do the needed social and economic spending,” Gopinath said Tuesday. “We’re very much in support of having this kind of global minimum corporate tax, ” Gopinath said.

“It is important to work with other countries to end the pressures of tax competition and corporate tax base erosion,” Yellen said in a speech Monday.

Global support will embolden U.S. Treasury Secretary Janet Yellen’s efforts to start an international dialogue said the ultimate rate should be determined by the Organization for Economic Cooperation and Development (OECD).

Read more here