June 16, 2021
Treasury Secretary Yellen testifies at Senate Finance Committee hearing on President's FY22 budget
The Senate Finance Committee's June 16 hearing on the President's fiscal year 2022 Budget with Treasury Secretary Janet Yellen featured discussion on a wide range of issues, including the President's international tax proposals, the status and future of OECD negotiations over BEPS 2.0, and the recent ProPublica leak of certain taxpayer information. Secretary Yellen will testify on the budget on June 17 before the House Ways and Means Committee.
Testimony from the hearing is available here.
In opening statements, Chairman Ron Wyden (D-OR) began by discussing the recent and unauthorized disclosure of taxpayer information by ProPublica, a nonprofit investigative news organization. Wyden said that the Committee takes the confidentiality of taxpayer data very seriously and expects that an investigation is underway. He also thanked Yellen for her work in negotiating an agreement with the G-7 on a 15 percent global minimum tax rate in order to "stop the race to the bottom." But Wyden also expressed concern about the digital services taxes (DSTs) imposed by a number of countries still in place and applying to U.S. high-tech companies, saying the "key to moving forward is putting a quick stop to discriminatory digital services taxes that unfairly target American workers."
In his statement, Ranking Member Mike Crapo (R-ID) expressed concern with the tax increase proposals in the President's budget and proposals to inject more social policy goals into the income tax system. Crapo took issue with the budget's proposal to institute additional reporting requirements on financial institutions relating to inflows and outflows from financial accounts, especially in light of the ProPublica leak of taxpayer information. Finally, Crapo remarked that he looked forward to hearing about the political agreements between Treasury and the G-7, especially in light of the international tax proposals in the budget, and noted that the United States is the only other country to enact something like a global minimum tax on the foreign-source earnings of its headquarter companies.
In her statement, Treasury Secretary Janet Yellen called for an ambitious fiscal policy to address structural economic challenges relating to wage, racial, and gender inequality. Yellen said the President's budget, which includes the American Jobs Plan and the American Families Plan, will repair the foundations of the economy through a series of smart policies relating to child care and paid family leave, mass modernization of America's infrastructure, and investments in housing and education. She said the budget is both "fiscally strategic and fiscally responsible" as a result of tax increases that would not touch the vast majority of Americans who earn less than $400,000 a year.
Additional information, including a summary of select member questions and witness responses from the Q&A, is available in the attached Tax Alert.
Senate Finance Committee hearing on President’s FY22 budget