Ms. Yellen cast the framework as a victory for tax fairness, saying that decades of competition among countries to reduce tax rates to woo corporations across national lines have “not only failed to attract new businesses, they have also deprived countries of funding for important investments like infrastructure, education and efforts to combat the pandemic.”
In place of that race to reduce rates, she said, “America will enter a competition that we can win; one judged on the skill of our workers and the strength of our infrastructure. We have a chance now to build a global and domestic tax system that lets American workers and businesses compete and win in the world economy.”
Conservative economists — including some who served in Mr. Trump’s administration — have praised global efforts to reduce corporate taxes, predicting they would bolster economic growth and worker incomes. The top Republican on the Ways and Means Committee, Representative Kevin Brady of Texas, slammed the framework and criticized Mr. Biden on Thursday.
“This is a dangerous economic surrender that sends U.S. jobs overseas, undermines our economy and strips away our U.S. tax base,” Mr. Brady said.
And critics said the plan was hardly watertight.
Alex Cobham, chief executive of the Tax Justice Network, a advocacy group based in London that fights tax avoidance, said that although a higher effective minimum tax rate would benefit most countries — including the richest — the O.E.C.D. plan “gives little to lower-income countries, and leaves much of the incentive for profit shifting intact.”
Challenges remain for the agreement and for Mr. Biden’s goal of reducing the offshoring of profits in order to escape taxation in the United States, which the president acknowledged in his statement.
The Biden administration has proposed a new tax plan that would effectively punish companies with headquarters in those holdout countries but that operate in the United States, by raising their tax liabilities significantly. Mr. Biden has pushed Congress to approve that tax change, along with an increased minimum tax on revenue earned by American companies outside the United States, to help fund his $4 trillion economic agenda that he hopes to pass this summer.
“Building on this agreement will also require us to take action here at home,” Mr. Biden said Thursday. “We must adopt the global minimum tax, among other measures I have proposed, to make sure corporations pay their fair share.”