President Joe Biden has pitched to Republicans the idea of a 15 percent minimum tax on U.S. corporations, as well as strengthened IRS enforcement efforts, as a way to fund an infrastructure package.
The idea is that companies that have lots of tax credits and deductions would be required to pay at least 15 percent. It is a response to situations in which companies like Amazon and Netflix have avoided paying federal income taxes despite turning a profit because they used current tax programs to reduce their tax bills.
Biden’s plan also would increase tax revenues by conducting more audits of taxpayers.
Those two funding measures already were included in Biden’s tax plans. The White House sees the offer as raising money without increasing tax rates or rolling back President Donald Trump’s 2017 tax cuts, something that Republicans have said is a red line in the negotiations.
Biden earlier proposed a $1.7 trillion infrastructure plan to Republicans. The proposal included a 28 percent corporate tax rate. Letting go of that measure as part of the infrastructure package would eliminate what the Treasury Department estimates is $857.8 billion in revenue over a decade.
The 15-percent minimum tax would generate $148.3 billion, and the IRS enforcement plan an additional $778.8 billion, the Treasury estimates, which would generate about $927.1 billion in infrastructure spending.
Infrastructure talks continue between the parties.
White House press secretary Jennifer Psaki stressed that the 15 percent profits tax was included in Biden’s American Jobs Plan and proposed budget, and said the president was “absolutely not” abandoning efforts to raise the corporate rate to 28 percent. She characterized the latest offer as an attempt to find a path forward on this specific negotiation with Republicans.
Source: Transport Topics