On Tuesday, Janet Yellen provided further details into the Biden administration’s ambitious corporate tax plans, which are expected to increase government revenue, and help pay for the administration’s proposed $2.25 infrastructure package.
US Treasury Secretary Janet Yellen provided additional insight into “The Made in America Tax Plan,” which is supposed to remove incentives for companies to move profits overseas, increase government tax revenue to help fund critical social problems, as well as increase fairness to all Americans. If the plan materializes, it would reportedly generate upwards of $2.5 trillion in revenue over a span of 15 years.
However, the tax plan also means that American companies would no longer be able to benefit from the numerous quirks embedded in the tax code, which allowed for reduced tax liabilities by shifting profits overseas. The tax plan would also address climate change, by substituting fossil fuel subsidies with clean energy production tax incentives.
“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,” Yellen explained in a phone briefing with reporters. “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, which is why we’re proposing this ‘Made in America’ tax plan. It changes the game we play,” she continued.
In addition, the plan would also eliminate provisions enacted by Former US President Donald Trump, that allegedly were unable to minimize corporate inversions and overseas profit shifting. Instead, the Biden administration would replace the provisions with more stringent anti-inversion regulations and tougher penalties for profit-stripping. The Biden administration’s plan would also strip subsidies engrained in the tax code for oil and gas, such as drilling cost deductions. The Treasury Department projects that the move would generate approximately $35 billion within the decade.
Information for this briefing was found via the US Treasury. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.