Ahead of President Joe Biden’s speech in Pittsburgh on Wednesday evening, the White House has released a fact sheet on the proposed American Jobs Plan to fund additional spending on infrastructure and R&D. The proposal’s tax increases on corporations are among the most harmful options to pay for the increased spending. While the President’s plan emphasizes making goods in America, the tax increases will raise the cost of production in the U.S, erode American competitiveness, and slow our economic recovery.
The American Jobs Plan (Biden infrastructure plan) would raise taxes on corporations in several ways:
Increase the federal corporate tax rate from 21 percent to 28 percent and tighten inversion regulations.
Raise the tax on Global Intangible Low Tax Income (GILTI) to 21 percent, calculate it on a country-by-country basis, and eliminate the exemption of a 10 percent return on tangible investment abroad (QBAI).
Impose a 15 percent minimum tax on corporate book income, which would be levied on a firm’s financial profits instead of taxable income for firms with revenue over $100 million.
Repeal the Foreign-Derived Intangible Income (FDII) deduction, which incentivizes firms to move intellectual property (IP) into the U.S.
Provide a tax credit for certain onshoring activity and deny expense deductions on jobs that were offshored.
Increase corporate tax enforcement.
Eliminate certain deductions and credits for the fossil fuel industry.
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