US Secretary of the Treasury Janet Yellen on Wednesday unveiled a detailed sales pitch for US President Joe Biden’s proposed new corporate-tax code, a plan that she said would be fairer to all Americans, remove incentives for companies to shift investments and profit abroad, and raise more money for critical needs at home.
Expanding on the tax proposals released last week in Biden’s US$2.25 trillion economic package, the Treasury said that over a decade the changes would bring back about US$2 trillion in corporate profits into the US tax net, with about US$700 billion in federal revenue streaming in from ending incentives to shift profits overseas.
All told, the extra tax take of about US$2.5 trillion over 15 years would pay for Biden’s eight-year spending initiative, which is aimed at infrastructure, green investments and social programs that would support a larger labor force, the Treasury said.
Few major corporations would be untouched, with tech giants such as Apple Inc and Microsoft Corp likely to pay more.
“Our tax revenues are already at their lowest levels in generations, and as they continue to drop lower we will have less money to invest in roads, bridges, broadband and R&D [research and development],” Yellen told reporters during a telephone briefing. “By choosing to compete on taxes, we’ve neglected to compete on the skill of our workers and the strength of our infrastructure. It’s a self-defeating competition.”
The Treasury released a 17-page report that will likely serve as a road map for administration officials and lawmakers seeking to navigate the combined package of spending and tax proposals through the US Congress in coming months.
The key elements of the corporate tax plan include raising the US corporate rate to 28 percent from 21 percent, and imposing minimum taxes on foreign earnings as well as the domestic profits that corporations report to shareholders, changes that would significantly increase the taxes companies owe.
The tax proposals already face sharp opposition from Republican lawmakers and pushback from some moderate Democrats.
With the Senate split 50-50, Biden cannot afford to lose the support of a single Democratic senator if he wishes to push through any portion of the package.
While most business groups have come out in opposition to the tax increases, some have acknowledged that there could be benefits from higher corporate taxes to fund infrastructure spending.
Amazon.com Inc CEO Jeff Bezos on Tuesday said that he would support a tax-rate increase, but did not specify a number.
The proposal for a global minimum tax comes as the Organisation for Economic Co-operation and Development (OECD) is managing talks with about 140 countries, including the US, on establishing a worldwide levy on corporate profits.
A global rate has yet to be decided, although prior proposals had suggested rates at about 12.5 percent. Biden’s plan for 21 percent would be significantly higher and could complicate negotiations.
The Treasury report featured a raft of data to support the administration’s case.
US-based companies that operate globally collectively paid a 7.8 percent effective rate in 2018, the nonpartisan Joint Committee on Taxation said.
The year before, corporations paid 16 percent. Across member countries of the OECD corporate tax revenues are equivalent to an average 3.1 percent of GDP. In the US, it is 1 percent, the Treasury said.
Several hundred people have already booked their tickets and begun training for a spectacular voyage: a few minutes, or perhaps days, in the weightlessness of space. The mainly wealthy first-time space travelers are preparing to take part in one of several private missions which are preparing to launch. The era of space tourism is on the horizon 60 years after Soviet cosmonaut Yuri Gagarin became the first person in space. Two companies, Virgin Galactic and Blue Origin LLC, are building spacecraft capable of sending private clients on suborbital flights to the edge of space lasting several minutes. Glenn King is the director of
SPECULATION: The integrated house and land transaction income tax has been amended as the real-estate market heats up because of high liquidity and low interest rates Lawmakers across party lines yesterday agreed to July 1 as the provisional date on which a draft amendment to the Income Tax Act (所得稅法) is to come into effect, with the aim of curbing real-estate speculation. The consensus was reached following interparty negotiations at the legislature’s Finance Committee to determine when revisions to the “integrated house and land transaction income tax” would take effect. The committee on Monday last week passed a number of revisions to the act, but failed to agree on when they would take effect. Under the proposed revisions, the tax would be set at 45 percent
TAICHUNG PLANT: An official said that generator No. 3 had been retrofitted and it generates 0.46g of particulate pollution per kilowatt-hour, down from 0.6g to 0.7g A spike in demand for electricity made it necessary to restart the third coal-fired generator at the Taichung Power Plant, Taiwan Power Co (Taipower, 台電) said yesterday as a feud with the Taichung City Government lingers. Taichung Mayor Lu Shiow-yen (盧秀燕) has sought to keep the generator from being used. In 2019, he revoked Taipower’s license to operate the generator. However, the state-run utility has taken the city government to court over the license revocation and won the case in February last year, Taipower manager Chang Ting-shu (張廷抒) said. “We would like to remind the Taichung City Government that operation of the third
Broadband providers are seeing delays of more than a year when ordering Internet routers, becoming yet another victim of chip shortages choking global supply chains and adding challenges for millions still working from home. Carriers have been quoted order times as long as 60 weeks, more than doubling previous waits, said people familiar with the matter, who asked not to be named because the discussions are private. Sharp COVID-19 manufacturing shutdowns a year ago were exacerbated by a prolonged surge in demand for better home broadband equipment, said Karsten Gewecke, head of European regional business for Zyxel Communications Corp (合勤), a Taiwan-based