Biden's corporate tax hike would hurt some companies more than others

Brunilde Fioravanti
Aprile 6, 2021

It's been less than a week since Biden revealed an infrastructure bill and his plan to pay for it. "That starts with ending incentives to ship jobs overseas and closing loopholes that allow companies to stash their profits in tax havens, and, instead, rewarding companies that invest in the United States".

"We need an worldwide tax system that rewards companies making investments here in the USA, particularly in cutting-edge technologies that will dictate the future success of our economy and ability to create good-paying jobs", said Senator Mark Warner.

"It's more than just me, Hoppy", he said. "Those that did, most of it was spent on stock buybacks", Warner told reporters on a conference call.

The senators' plan focuses on increasing the tax rate on USA multinational corporation foreign earnings and setting it on a country-by-country basis. In addition, the plans would create new incentives for investment in research and headquarters jobs in the United States.

The proposal will likely face strong opposition from Republicans, who have criticized Biden's plans to roll back their party's signature Trump-era legislative achievement as putting USA companies at a competitive disadvantage. But that doesn't take the sting out of President Biden's proposal to raise the corporate tax rate to 28% from 21%, The Wall Street Journal reports.

Supporters of the increase say that domestic companies and American workers stand to benefit from the Biden administration's proposal to spend more than $2 trillion on infrastructure and other improvements, says Matt Gardner, a senior fellow at the progressive Institute on Taxation and Economic Policy.

Despite his promise, Biden said after Easter break he will meet with lawmakers to push the plan forward.

Yellen on Monday called for a global minimum tax as she participates in her first International Monetary Fund and World Bank Spring Meetings as treasury secretary. So in order for the bill to pass in the gridlocked Senate, it will need support from every Democratic-voting senator.

His comments come after Senator Joe Manchin also said Monday that he does not support increasing the corporate tax rate to 28%.

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