April 17, 2021

President Biden Unveils Plan to Raise Corporate Taxes

Some companies, however, expressed openness to the new proposals on Wednesday.

John Zimmer, the president and co-founder of Lyft, told CNN that he supports Mr. Biden’s proposed 28 percent corporate tax rate.

“I think it’s important to make investments again in the country and the economy,” Mr. Zimmer said.

The Biden administration also made clear that the proposal was something of an opening bid and that there will be room to negotiate.

Commerce Secretary Gina Raimondo urged lawmakers on Wednesday not to reject the plan out of hand, inviting them to have a “discussion” — even as she suggested the basic parameters of the proposal would remain in place.

“We want to compromise, she said during a briefing at the White House. “What we cannot do, and what I’m imploring the business community not to do, is to say, ‘We don’t like 28. We’re walking away. We’re not discussing.’ That’s unacceptable.”

The plan would also repeal provisions put in place during the Trump administration that the Biden administration says have failed to curb profit shifting and corporate inversions, which involve an American company merging with a foreign firm and becoming its subsidiary, effectively moving its headquarters abroad for tax purposes. It would replace them with tougher anti-inversion rules and stronger penalties for so-called profit stripping.

The plan is not entirely focused on the international side of the corporate tax code. It tries to crack down on large, profitable companies that pay little or no income taxes yet signal large profits with their “book value.” To cut down on that disparity, companies would have to pay a minimum tax of 15 percent on book income, which businesses report to investors and which are often used to judge shareholder and executive payouts.

Article source: https://www.nytimes.com/2021/04/07/business/biden-corporate-tax-increases.html

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