For the first time, the US has a Secretary of the Treasury. Your greatest challenge is the consequences of the coronavirus pandemic. Higher taxes are also imminent.
Janet Yellen is the first US Secretary of the Treasury. Your 77 predecessors in office were all men, not counting the men who temporarily administer the office. On Monday evening, the US Senate clearly confirmed Yellen in the office with 84 to 15 votes. The former central bank chief has broad support in both US parties. Topic number 1 is the economic recovery from the effects of the coronavirus pandemic.
US President Joe Biden has unveiled a $ 1.9 trillion package to stimulate the economy. Yellen’s task now is to get it through the US parliament and to get as many of her boss’s ideas through as possible. The 74-year-old economist strives for both fairness for the less well-off and a more environmentally friendly orientation of the US economy. In addition, the new minister is planning tax incentives for “green” energy. Yellen said that at hearings of the US Senate.
In the short term, it supports additional government debt. These are no contradiction to long-term responsible budget policy. An economic upturn will make it easier to service debts.
Regulation for cryptocurrency
The woman was skeptical about Bitcoin & Co. “Cryptocurrencies are of particular concern. I believe that many are primarily used for illegal financing, at least when you look at the transactions,” Yellen said in an oral hearing. “And I think that we need to investigate ways in which we can reduce the use (of the cryptocurrencies) and ensure that money laundering does not occur through these channels. ”
Yellen then rowed back in a written questionnaire: “I think it is important to consider the advantages of cryptocurrencies and other digital assets, including their potential for increasing the efficiency of the monetary system. At the same time, we know that they are used to finance terrorism, for money laundering as well as in support of harmful activities that threaten the national security of the US and the integrity of the financial system, “she stated.” I believe we need to look carefully at how we encourage and encourage their use for legitimate activities for harmful and illegal activities. ” She strives for effective regulation for crypto money and other IT innovations in the financial sector.
More pressure on China
Internationally, Yellen has to repair relations with former US partners, which were badly damaged under Donald Trump. In the economic war against China, the United States is particularly dependent on the support of the European Union, neighboring countries Canada and Mexico, and other allies.
Yellen accuses China of unfairly gaining advantages in the technology area. The US government will counter this with the “entire range” of means. Statistics also show that China is not meeting the commitments it made in a trade agreement it negotiated with Donald Trump.
Yellen wants to raise the corporate income tax, which was reduced from 35 to 21 percent under Donald Trump, to 28 percent. There are also tax hikes for the rich. And she wants to work internationally, especially within the framework of the OECD and the G20, for fair international taxation: Profits should no longer be artificially shifted to tax havens.
This should counteract the erosion of the tax base and at the same time solve the problem of customs-equivalent “digital taxes”. It is necessary to “update global tax rules in order to end the undercutting race and prevent global profit shifts while at the same time ensuring the competitiveness of US companies.” Yellen is thinking of a worldwide minimum tax rate.
Yellen faces a special hurdle with these and other tasks: Not only is the country deeply divided politically, but the minister also lacks a well-trained team of experienced officials. Under Trump’s Treasury Secretary Steven Mnuchin, many Treasury Department employees have resigned and many important positions are vacant. Much experience and institutional knowledge have been lost that can hardly be replaced by the new hires that are now necessary.