Corporate Tax

Biden’s plan for the minimal corporate tax price may boomerang for the US

Fox News employee Liz Peek and economist Steve Moore discuss the American tax rates for “Kudlow”

The Biden government’s proposal for a minimum corporate tax rate as part of their infrastructure plan could have unintended consequences, economists say.

The plan requires businesses to pay a minimum tax rate of 15% regardless of the deductions, and is similar to the alternative minimum tax for individuals.

The White House would be willing to temporarily postpone its attempt to raise the highest corporate tax rate from 21% achieved under President Trump’s Tax Cuts and Jobs Act to 28%. The plan already ran into difficulties in Congress.

A global minimum corporate tax rate is a “safety net against the kind of loopholes that have pervaded our tax laws and that have been so beneficial to the top performers,” said Jared Bernstein, a member of the White House Economic Advisory Council on MSNBC on Friday.

BIDEN SUSPENSION OF ALASKA OIL, GAS LEASING GOES AGAINST GOVERNANCE: GOV. DUNLEAVY

Treasury Secretary Janet Yellen attended a meeting with G7 finance ministers in London on Friday and Saturday and the group came together on a global minimum tax.

“The G7 took significant steps this weekend to end the existing damaging dynamic and made commitments today that will provide a huge boost to a robust global minimum tax of at least 15%. This global minimum tax would end the race, be at the forefront of corporate taxation and ensure fairness for the middle class and working population in the US and around the world, “Yellen said at the meeting.

US Treasury Secretary Janet Yellen and her Italian counterpart Daniel Franco pose together ahead of the G7 Finance Ministers meeting at Lancaster House, London, ahead of the G7 Heads of State and Government Summit on Friday, June 4, 2021. (Steve Reigate / Pool via AP)

The group agreed to support the 15% rate, UK Treasury Secretary Rishi Sunak said on Saturday.

High-tax countries such as Germany and France, whose corporate tax rates are among the highest in the world at 30% and 26.5% respectively, could benefit from the transaction.

British Chancellor of the Exchequer Rishi Sunak (center) at a meeting of finance ministers from all G7 countries at Lancaster House in London on Friday, April 4th. (Stefan Rousseau / Pool via AP / AP Newsroom)

Despite the agreement among G7 members, the plan has yet to be approved by Congress and is likely to face opposition from Republicans.

A spokesman for Senator Shelley Moore Capito, RW.Va., said the Senator and Biden participated in a phone call on Friday and would continue to work on a bipartisan infrastructure package. They agreed to reconnect on Monday.

Economists fear that reaching an agreement will be difficult and that if it is reached it could boomerang in the US

“Countries like Ireland will be an obstacle to a final deal,” Greg Valliere, chief US strategist at Toronto-based AGF Investments, which has nearly $ 39.5 billion in assets, told FOX Business.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Ireland’s 12.5% ​​corporate tax rate has attracted 700 US companies with more than 160,000 employees, according to the American Chamber of Commerce Ireland, a group representing US companies with a mission to serve as their voice in Ireland and Ireland as Choice for US to position investment. The organization reports that current US investments in the Emerald Isle are $ 444 billion.

“Some overseas business locations can lower their tax rates even further,” said Sri Kumar, chief economist and strategist at Sri Kumar Global Strategies, based in Santa Monica, California. “That can lead to capital flight from the US.”

Related Articles