Alongside a sweeping infrastructure plan, U.S. President Joe Biden is proposing an overhaul of the corporate tax system that would finance increased spending and seek to discourage the practices of offshoring by increasing the minimum tax on U.S. corporations.
- Set the corporate tax rate at 28%, up from the current 21% but less than the 35% it had been prior to the 2017 Tax Cuts and Jobs Act
- Discourage offshoring by boosting the global minimum tax for U.S. multinational corporations to 21%
- Prevent U.S. corporations from inverting or claiming tax havens as their residence
- Deny companies expense deductions for offshoring jobs and credit expenses for onshoring
- Eliminate what the plan calls a "loophole" for intellectual property that encourages offshoring jobs and invest in effective R&D incentives
- Enact a minimum tax of 15% on large corporations’ book income
- Eliminate tax preferences for fossil fuels
- Ramping up enforcement against corporations.
Most if not all of these proposals would need to be approved by Congress.
The fact sheet signals proposals regarding high-earning/high-net-worth individuals may be coming soon: "The President looks forward to working with Congress, and will be putting forward additional ideas in the coming weeks for reforming our tax code so that it rewards work and not wealth, and makes sure the highest-income individuals pay their fair share." (Emphasis added.)
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