Biden releases full tax plan to raise $2.5TRILLION in 15 years
(*15*)His speech comes as his Treasury Department unveiled its plan to overhaul the corporate tax code, which, if enacted, would raise $2.5 trillion in revenue over 15 years to pay for the infrastructure package.
(*15*)Biden’s proposed tax plan would hike the corporate tax rate to 28 percent, increase the de facto universal minimum tax and crack down on companies that pay little or no income taxes with their ‘book value.’
(*15*)The president will look to counter the criticism and promote his plan as a jobs booster in his remarks later Wednesday.
(*15*)President Biden will ‘talk about what infrastructure means in the 21st century and why it’s extends far beyond just roads and bridges,’ a White House official told DailyMail.com.
(*15*)Republicans have criticized the president’s plan for containing items outside the scope of traditional infrastructure. Biden’s plan spends billions on roads, bridges and highways but it also funds additional projects such as broadband internet across the nation, affordable housing, improvements to schools and day care centers, and a Civilian Climate Corps.
(*15*)The White House argues these items are tied into the nation’s infrastructure.
(*15*)’He’ll forcefully refute the notion that investments in our electrical grid, in clean water, in high-speed internet, are anything less than essential infrastructure if we want to create good-paying jobs, successfully compete with China, and ensure prosperity is shared with communities that previously have been left out,’ the White House official said.
(*15*)The administration also argues the tax plan is necessary and its goal ‘is to make American companies and workers more competitive by eliminating incentives to offshore investment, substantially reducing profit shifting, countering tax competition on corporate rates, and providing tax preferences for clean energy production.’
(*15*)But corporate America is not convinced.
(*15*)The Chamber of Commerce and the Business Roundtable have pushed back against Biden’s tax hikes, claiming they will crush American competitiveness – an argument Republicans and some moderate Democrats have echoed.
(*15*)The long list of items in Biden’s infrastructure proposal and his plan to raise the trillions needed to pay for his wish list have become a dueling set of controversies for the administration as it struggles to get enough support on Capitol Hill to pass the package.
President Joe Biden will tackle Republican criticism of his $2.3 trillion infrastructure plan in a speech Wednesday
(*15*)Biden’s push to pay for the package includes:
(*15*)Hike the corporate tax rate
(*15*)Biden would raise the corporate tax rate in the US to 28 percent from 21 percent. This move would partially undo the Trump administration’s cut of the corporate tax rate from 35 percent in its 2017 tax bill.
(*15*)The White House argues this would bring the United States in line with other first world nations when it comes to a tax on businesses.
(*15*)Double the de facto universal minimum tax
(*15*)Biden’s plan would double the de facto universal minimum tax to 21 percent. It would also toughen its requirements so companies would have to pay the tax on a wider span of income across countries.
(*15*)Raise universal corporate income tax
(*15*)Additionally, American officials are working with the G20 nations to enact a minimum universal corporate income tax as part of the administration’s effort to offset any disadvantages from their plan to increase the U.S. corporate tax rate.
(*15*)Treasury Secretary Janet Yellen on Monday urged the move, saying it would ‘stop the race to the bottom.’
(*15*)’Competitiveness is about more than how U.S.-headquartered companies fare against other companies in universal merger and acquisition bids,’ Yellen noted. ‘It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods.’
(*15*)The U.S. is involved in talks with about 140 nations to develop a universal agreement on minimum levies, led by the Organization for Economic Cooperation and Development, but participants haven’t yet reached a deal.
(*15*)Enact a book value income tax
(*15*)The plan would enact a 15 percent minimum tax on book income of large companies that report high profits, but have little taxable income.
(*15*)Book income is what businesses report to investors and which is often used to judge shareholder and executive payouts.
(*15*)The tax – aimed at companies that report large profits to investors but low tax payments would apply only to companies with income exceeding $2 billion. That is up from the $100 million threshold that Biden advocated for in the campaign.
(*15*)The result is that just 180 companies would even meet the income threshold and just 45 would pay the tax, the Wall Street Journal noted.
(*15*)Finally, the plan would replace flawed incentives that reward excess profits from intangible assets with more generous incentives for new research and development; replace fossil fuel subsidies with incentives for clean energy production and ramp up enforcement to address corporate tax avoidance.
(*15*)Biden would also boost the Internal Revenue Service’s budget so that it can step up enforcement and tax collection efforts.
(*15*)The administration has begun its push to defend it tax proposal and argue its long list of items in the infrastructure bill are needed to keep the country competitive.
(*15*)Commerce Secretary Gina Raimondo joined the daily White House press briefing on Wednesday to argue ‘the fact of the matter is the corporate structure, today is broken.’
(*15*)’Many, many companies – large profitable companies – pay no corporate taxes. So I’d like to think we can all agree that it needs to be improved, level the playing field, close the loopholes and have a have a discussion around how we do this together to improve competitiveness,’ she said.
(*15*)She dismissed criticism that the plan would kill American jobs.
(*15*)’We must make these investments in infrastructure in order to compete,’ she said.
(*15*)In his remarks on Wednesday afternoon, Biden will also ‘call on Congress to set aside partisanship to work with him on finding a path forward’ on the infrastructure package.
(*15*)With Democrats in control on Capitol Hill by tight margins, the president can’t afford to lose any votes among his own party.
(*15*)And some tolerante Democrats have argued Biden’s plan is too small.
(*15*)Meanwhile, Senate Republican Leader Mitch McConnell has referred to Biden’s plan as a ‘Trojan Horse’ for issues Democrats want to advance. Other Republicans have argued a stream-lined, traditional infrastructure package could pass with bipartisan support.
Commerce Secretary Gina Raimondo said the current corporate tax structure is ‘broken’ and needs to be fixed
(*15*)And Republican Senator Roy Blunt of Missouri said he told the White House if they want bipartisan support on an infrastructure plan, it needs to have just infrastructure.
(*15*)’I think it’s a big mistake for the administration. They know I think it’s a mistake,’ Blunt said on ‘Fox News Sunday.’ ‘And I also think it would be an easy victory if we go back and look at roads and bridges and ports and airports and maybe even underground water systems and broadband. You’d still be talking about less than 30 percent of this entire package and it’s an easily doable 30 percent.’
(*15*)’The other 70 or so percent of the package that doesn’t have very much too do with infrastructure,’ he noted on ABC’s ‘This Week.’
(*15*)A CNN analysis found that traditional infrastructure projects account for 30 per cent of Biden’s plan.
(*15*)Biden’s plan includes $621 billion for transportation, $400 billion for homecare service, $300 billion for manufacturing and $180 billion for research and development, according to a White House fact sheet.
(*15*)Here’s a more detailed breakdown of what it contains:
- $115 billion to modernize the bridges, highways, roads, and main streets that are in most critical need of repair – including 20,000 miles of highway and 10,000 small bridges
- $20 billion to improve road safety for all users
- $85 billion to modernize existing transit and help agencies expand their systems to meet rider demand
- $80 billion for Amtrak repairs
- $174 billion investment in electric vehicles
- $25 billion in our airports
- $50 billion to safeguard critical infrastructure
- $17 billion in inland waterways, coastal ports, land ports of entry, and ferries
- $111 billion to replace lead pipes and service lines and to modernize drinking water and sewer systems
- $100 billion to protect nature-based infrastructure – lands, forests, wetlands, watersheds, and coastal and ocean resource; to build up electrical system; expand tax credits for clean energy generation and storage; plug orphan oil wells and mines; and redevelop Superfund sites
- $40 billion to improve the infrastructure of the public housing system in America
- $100 billion to upgrade and build new public schools
- $12 billion for community colleges
- $25 billion to help upgrade child care facilities
- $10 billion in the modernization, sustainability, and resilience of federal buildings
- $400 billion toward expanding access to quality, affordable home- or community-based care for aging relatives and people with disabilities
- $35 billion investment in climate science
- $10 billion for a new Civilian Climate Corps
- $100 billion in workforce development programs, including a call for Congress to ensure all workers have a free and fair choice to join a union by passing the Protecting the Right to Organize (PRO) Act
- $300 billion for manufacturing
- $180 billion for research and development
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