US President Joe Biden received an economic briefing with Treasury Secretary Janet Yellen in the Oval Office of the White House in Washington on January 29, 2021.
Kevin Lamarck | Reuters
Treasury Secretary Janet Yellen touted the Corporate Tax Act amendment proposed by the Biden administration on Wednesday, making plans more equitable, reducing incentives for companies to move factories and income abroad, and income for domestic priorities. Said in detail that it will produce.
Treasury officials say President Joe Biden’s $ 2 trillion infrastructure-related made-in-American tax system will regain about $ 2 trillion in corporate profits to the U.S. currently being earned abroad. Stated.
Estimates calculated by the Treasury and the Joint Committee on Taxation show that modifying incentives for offshore businesses could generate revenues equivalent to $ 700 billion.
Overall, Made In America reforms are estimated to generate approximately $ 2.5 trillion over 15 years to cover eight years of spending on roads, bridges, transportation, broadband and other projects.
Biden spoke about his administration’s plans from the Eisenhower Executive Building in Washington on Wednesday afternoon.
“It’s not a plan to tinker with the edges. Unlike what we’ve done since we built the interstate highway system and won the Space Race decades ago, this is once in a generation to America. It’s an investment, “Biden said.
“This is a plan for millions of Americans to work to repair what’s broken in our country. Tens of thousands of miles of roads, highways, and thousands of bridges are in desperate need of repair. It’s also a blueprint for the infrastructure needed for tomorrow, “he says. Added.
The Treasury’s 17-page report could serve as an overview for lawmakers seeking to guide one of the largest spending and taxation proposals through Congress in 2021.
The main provisions of the plan include raising the US corporate tax rate from 21% to 28% and imposing a minimum tax on both foreign and domestic income that companies report to shareholders. All of these are expected to raise tax bills for US companies.
“The largest and most profitable US companies face lower tax rates than regular Americans,” Treasury officials said in a presentation released Wednesday. “Made in America taxation will reverse these trends …. This plan eliminates the prejudices of current tax laws in favor of offshore economic activity and shifts corporate profits with national minimum taxes. It will be a big end. “
Biden said Wednesday he was prepared to raise corporate interest rates a bit and was not married to 28%.
Business groups oppose this change, arguing that it undermines investment and the global business competitiveness of US companies. A Treasury report claims that the 2017 tax cuts were overkill and generated little economic benefit, pointing out that foreign investors received a significant portion of their profits.
The White House proposal will also hit key elements of Trump’s 2017 corporate tax cut, including the source erosion known as “BEAT” and the anti-abuse tax. BEAT is designed to punish companies that transfer profits abroad, but has been criticized for taxing some non-abuse transfers and overlooking companies that use tax avoidance strategies.
The president’s proposed tax of at least 15% on booked corporate income for companies that report large profits to investors but pay low taxes has a return of over $ 2 billion from the current level of $ 100 million. Applies only to businesses.
According to Treasury calculations, this can affect about 45 businesses, with the average tax-facing company increasing its minimum tax obligation by about $ 300 million each year.
Biden tax system regains $ 2 trillion in corporate profits from abroad: Treasury
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