Dems ready tax hike for multinational corporations
WASHINGTON — Sen. Ron Wyden, D-ore., who is in charge of writing tax legislation, will release a new plan Monday to overhaul the way the United States taxes multinational corporations, in what could be a blueprint for how lawmakers will finance President Joe Biden’s infrastructure plan.
The proposal, which is co-authored by Sen. Sherrod Brown, D-ohio, and Sen. Mark Warner, D-VA., could raise hundreds of billions of dollars from companies that operate across international borders, according to analyses of similar proposals by congressional scorekeepers.
In addition to raising revenue, the plan seeks to discourage companies from shifting profits and jobs to low-tax countries to avoid paying taxes in America. It also creates new incentives through the tax code for companies to invest in research and manufacturing in the United States.
The proposal would tweak several aspects of President Donald Trump’s signature 2017 tax law, which created a series of new mechanisms for how the United States taxes multinational companies.
It would increase the rate of a global minimum tax that was included in that legislation and change how it is applied to income that corporations earn in various countries overseas.
It would also alter two other parts of the 2017 law in ways that the senators say would better encourage investment in America.
Those measures mirror the Biden administration’s ambitions on international taxation.
Last week, Biden proposed spending $2 trillion on a physical infrastructure package, financed over 15 years by increased corporate taxes.
That includes raising the corporate tax rate to 28 percent from 21 percent and a variety of changes to international tax rates.
On Monday, Biden continued to press for those increases, saying that companies need to pay their fair share and playing down concerns by Republicans that tax increases would drive investment out of the United States.
“There’s no evidence of that,” he said. “You’re talking about companies in the Fortune 500 that haven’t paid a single penny in tax for 3 years. Come on man.”
The president is expected to detail as much as $2 trillion more in education, health care and other spending initiatives later this month, much of which would be financed by raising taxes on high-earning individuals.
Biden’s advisers have estimated that his international tax proposals could raise more than $600 billion over the course of 10 years.
Wyden, in a news release, said that the senators tax plan would “not only generate critical revenue to pay for President Biden’s infrastructure package,” but would also “encourage additional investment in the United States and its workers.”
The Senate drafters do not specify the exact new tax rates associated with their plan or how much additional tax revenue it would raise, choosing instead to wait and set rates to match Democrats’ spending ambitions later this year. “I’m going to start rolling out specific proposals so that people can have ideas about how they might proceed,” Wyden said last month.
The presence of Brown, one of the most progressive Democrats in the Senate on tax issues, and the more centrist Warner, suggests that the Wyden package could attract widespread support in a Democratic caucus that likely cannot afford to lose a single vote in favor of Biden’s infrastructure plan.
Brown said in a statement that the plan would ensure that “corporations should pay their fair share, just like Ohio families do, and they shouldn’t get a tax break for shipping workers’ jobs overseas.”
Warner said the proposal would provide an incentive to invest in the United States, saying “we need an international tax system that rewards companies making investments here in the U.S., particularly in cutting-edge technologies that will dictate the future success of our economy and ability to create good-paying jobs.”