US President Joe Biden will receive an economic briefing with Treasury Secretary Janet Yellen at the Oval Office in the White House in Washington on January 29, 2021.
Kevin Lamarque | Reuters
Finance Minister Janet Yellen presented the Biden administration’s proposed amendments to the corporate tax code on Wednesday, saying in detail that the plan would be fairer, reduce incentives for companies to relocate factories and revenue overseas and increase revenue. generate for domestic priorities.
Treasury officials said the Made In America tax plan, linked to the $ 2 trillion infrastructure review, would earn about $ 2 trillion in U.S. corporate profits currently being earned overseas.
Estimates calculated by the Treasury Department and the Joint Tax Committee have found that addressing incentives for foreign affairs could generate $ 700 billion in revenue.
The Made In America reforms are estimated to generate about $ 1.5 trillion over 15 years in an effort to pay for eight years of spending on roads, bridges, transportation, broadband and other projects.
Biden spoke Wednesday afternoon about the plan of his administration from the Eisenhower Executive Office building in Washington.
“It’s not a plan that tampers on the sides. It’s a one-time investment in America, unlike what we have done since we won the highway system between the countries and the Space Race decades ago,” Biden said.
“It’s a plan that puts millions of Americans at work to repair what is broken in our country: tens of thousands of miles of roads and highways, thousands of bridges that urgently need repair. It’s also a blueprint of infrastructure needed for tomorrow, “he said. added.
The Treasury’s 17 – page report is likely to serve as an outline for lawmakers seeking to address one of Congress’ largest spending and tax proposals by 2021.
Key provisions of the plan include raising the U.S. corporate rate to 28% from 21%, and imposing a minimum tax on both foreign income as well as the domestic earnings that companies report to shareholders, which is expected to hurt the U.S. tax bill. company will increase.
“The largest for-profit U.S. companies have lower tax rates than ordinary Americans,” Treasury officials said in a submission Wednesday. The Made in America tax plan would reverse these trends. … The plan would largely eliminate the biases in current tax legislation that favor the offshoring of economic activity and largely end the shift of corporate profits with a country-by-country minimum tax . “
Biden said Wednesday that he would be willing to increase the corporate rate by a smaller amount and that he is not married by 28%.
Business groups are objecting to the changes, arguing that it would hurt the ability of investors and US businesses to compete for global business. The Treasury report claims that the 2017 tax cuts went too far and yielded little economic benefit, pointing out that foreign investors received a significant share of any profits.
The White House’s proposal will also include key elements of Trump’s 2017 tax cuts, including the basic erosion and anti-abuse tax, known as ‘BEAT’. Although the BEAT is intended to punish companies that shift profits abroad, there is criticism that they tax some non-offensive transfers and miss out on those who use tax avoidance strategies.
The president’s proposed 15% minimum tax on book revenue, aimed at those who report large profits to investors but low tax payments, only applies to companies with earnings of more than $ 2 billion, compared to the current $ 100 million level .
According to Treasury estimates, this could affect about 45 companies, and the average company facing the tax has an increased minimum tax liability of about $ 300 million each year.