Biden’s administration unveiled plans for an overhaul of the Corporate Tax Code on Wednesday, offering a range of proposals that require larger companies to pay higher taxes to help support the White House’s economic agenda.
If the plan is enforced, it will raise $ 2.5 trillion in revenue over a 15-year period.It will do so by bringing in major changes for American companies, which have a quirk in the tax code that allows them to reduce or eliminate their tax liability. Of them, often by moving their profits abroad. The plan also includes efforts to help fight climate change, proposing to replace fossil fuel subsidies with tax incentives promoting clean energy production.
Some companies show a willingness to pay more taxes. But the overall scope of the offer is likely to draw backlash from the business community, which has benefited for years from loopholes in the tax code and relaxed guidelines for its enforcement.
Finance Minister Janet L.Yellen said during a briefing with reporters on Wednesday that the plan would end a global corporate taxation that she said had destroyed the American economy and workers.
“Our tax income is already the lowest in a generation,” said Yellen. “If the decline continues, we will have less money to invest in roads, bridges, broadband and research and development.”
The Biden Administration Plan, announced by the Treasury Department, would increase the corporate tax rate to 28 percent from 21 percent.The administration said the increase would bring America’s corporate tax rate closer to other high-tech economies and reduce inequality. It will also remain lower than before Trump’s 2017 tax cut, when the rate was 35 percent.
The White House also proposed significant changes to a number of international tax provisions included in the Trump administration’s tax cuts, which the Biden administration described in the report as a policy to make America the last. Benefit foreigners The biggest change is doubling the de facto global minimum tax to 21 percent and stricter to force companies to pay taxes on a broader range of income across the country.
This is especially worrisome in business, Business Roundtable Chief Executive Joshua Bolten said in a statement this week. It “threatens to put the United States at a disadvantage in the big competition.”
The plan would repeal a provision made during the Trump administration that the Biden administration said had failed to reduce the profit shifting and corporate inversion involving American companies combined with foreign companies. And becoming a subsidiary, moving its headquarters overseas for tax purposes, it replaces these with stricter anti-inversion rules and tougher penalties for what is known as stripping profits.
The plan does not focus on the international side of the corporate tax code; corporations are trying to crack down on big, profitable companies paying little or no income tax. It also signals large profits for companies with “book value.” To reduce the disparity, companies are required to pay a minimum of 15 percent of the book revenue that businesses report to investors, and are often used to manage their income. Judge the payments of shareholders and executives.
One of the big beneficiaries of the plan is the Internal Revenue Service, which has seen their budget drop in recent years. The Biden management proposal will increase the taxation agency’s budget so that it can increase enforcement efforts and taxation.