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Yellen Favors Higher Corporate Tax; Capital Gains Worth Mulling


By Saleha Mohsin | Bloomberg Government
Treasury Secretary Janet Yellen said President Joe Biden favors boosting taxes on companies, and signaled openness to considering raising rates on capital gains, while steering clear of a wealth levy.
“A wealth tax has been discussed but is not something President Biden” favors, Yellen said at a conference on Monday hosted by the New York Times. She said such a tax would have significant implementation problems.
The administration is looking to boost the corporate tax to 28%, Yellen said. The Treasury chief said last week that revenue measures would be needed to help pay for Biden’s planned longer-term economic reconstruction program to help address concerns about debt sustainability.
Yellen also said that a hike in capital-gains tax might be something “worth considering.” Asked about a financial-transactions tax, she said, “One would have to examine closely what effect it would have” on ordinary investors.
Asked whether the Treasury would consider issuing a 100-year bond to take advantage of low yields, Yellen noted that the government already sells longer-term debt. While the Treasury could look again at new securities, market professionals think the demand for a 100-year bond “would be very tiny.” It would “probably be a very thin market,” she said.
The current longest-dated Treasury note is a 30-year security.
Yellen also said that she hadn’t anticipated an offer by Biden to become Treasury secretary, at a time when she was focusing on research while working at the Brookings Institution.
Noting the round-the-clock stress of a job like helming the Treasury, the former Federal Reserve chair said, “I was initially hestitant to get back into that.” Biden then made the case on how she could be helpful, Yellen said.
To contact the reporter on this story:
Saleha Mohsin in Washington at smohsin2@bloomberg.net
To contact the editors responsible for this story:
Scott Lanman at slanman@bloomberg.net
Christopher Anstey, Ana Monteiro
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