A group of Democratic senators want to overhaul international taxation, presenting a new proposal on Monday that would help pay for President Biden’s $ 2 trillion infrastructure plan. Senators focus on amending three specifics of the 2017 tax law passed under President Donald Trump, saying the provisions created new incentives to ship jobs overseas and the reforms would also be an investment in workers Americans.
Their proposal comes as the tax debate is set to escalate in Washington as Biden’s plan already faces hurdles in Congress, including with some Democratic lawmakers.
“Congress must ensure that mega-corporations pay their fair share to fund critical investments in the American people,” said Senate Finance Chairman Ron Wyden of Oregon. “It starts with ending incentives to ship jobs overseas and closing loopholes that allow companies to hide their profits in tax havens, and, instead, reward companies that invest in the United States. . “
Senators’ plan focuses on increasing the tax rate on the foreign profits of US multinationals and on its establishment country by country. It’s similar to Mr. Biden’s proposal, but lawmakers have left the door open on the tax rate – whether it matches the U.S. corporate tax rate or sets it slightly lower, like President l ‘proposed, at 21%. Their plan also aims to create incentives to invest in innovation in the United States rather than relocate factories, restore full credit for domestic investments and prevent larger companies from eroding the base. US tax.
“For decades our tax code has rewarded companies that shut down production in the United States and move American jobs overseas, and the Republican tax law of 2017 only makes matters worse, with its coupon discount of 50% for companies that relocate jobs to Mexico or China, ”said Sen. Sherrod Brown of Ohio.
“We need an international tax system that rewards companies that invest here in the United States, especially in advanced technologies that will dictate the future success of our economy and the ability to create well-paying jobs,” said Senator Mark Warner.
The Virginia Democrat said on Monday he had already expressed some concerns about Biden’s infrastructure plan. While he does not comment on the details of the president’s proposal to increase the U.S. corporate tax rate from 21% to 28%, he said he wanted to look at the plan in much more detail than ‘he hasn’t done so until now.
His comments come after Senator Joe Manchin also said on Monday that he did not support increasing the corporate tax rate to 28%. In a radio interview with Hoppy Kercheval, the West Virginia Democrat said the corporate tax rate should be 25%. Manchin also said he was not the only Democrat who was deeply convinced, saying there were six or seven others who did as well.
“We have to be competitive,” Manchin said. “And we’re not going to throw caution to the wind.”
The 50-50 split in the Senate, with Vice President Kamala Harris serving as a potential tie-breaker vote, gives centrists like Manchinese substantial power when weighing legislative proposals to move forward. Manchin said on Monday that if he did not vote to do so, “it’s not going anywhere.”
But Mr Biden on Monday reiterated his support for raising the corporate tax rate from 21% to 28% and dismissed fears it would drive businesses overseas.
“We were talking about a 28% tax that everyone thought was just fair enough for everyone,” he said. “51 or 52 Fortune 500 companies haven’t paid a single penny in taxes for three years. Come on, man.”
Speaking to reporters at Monday’s briefing, White House press secretary Jen Psaki said there would be different ideas for paying for the infrastructure plan, and there would be different tax proposals. and a range of issues that Congress will need to address in terms of compensation. and how it would work.
“This will all be part of the discussion,” said Psaki, whom she called a debutante.
The Biden administration briefed members of Congress last week about the infrastructure plan. Treasury Secretary Janet Yellen is due to brief House Democrats on Tuesday.
Alan He contributed to this report.