Biden introduces bid 2.5 trillion tax reform | Economy

Biden introduces bid 2.5 trillion tax reform |  Economy
President Joe Biden, in Washington this Tuesday.Kevin Lamarque / Reuters

U.S. President Joe Biden released details of the funding plan this Wednesday Two trillion dollars in investments in its ambitious infrastructure project, The second phase of its economic program Approval of the stimulus package to overcome the infection. The plan aims to raise tr 2.5 trillion over the next 15 years by raising corporate taxes, at least 15% of after-tax profits, and encouraging large corporations to repatriate their profits outside of taxes.

The Joe Biden administration’s new taxation was made up of three pillars. First, the corporation tax increase is a seven-point percentage increase from the current 21% – as a result of Donald Trump’s 2017 tax reform – to 28%, which, however, remains less than 35% until the presidency. Republic. Second, to take strong action against companies taxed in other countries with a more favorable tax environment, such as the Bahamas or Ireland; This is the situation of many multinational companies, including many large technology companies. That is, increase taxes on foreign income and introduce at least 15% of the after-tax profits declared in the consolidated income statements.

Third, Biden management will end subsidies to fossil fuel companies and replace them with incentives for clean energy production, which is a step in line with the idea of ​​a sustainable and green economy, which is changing its political agenda.

Companies that are currently taxed abroad cannot avoid paying U.S. taxes on fees they pay to foreign subsidiaries. The Treasury Department predicts that this will force companies to repatriate $ 2 trillion in profits overseas over the next decade.

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Faced with opposition from large corporations, all Republicans and some Democrats, Biden explained one of his persistent arguments to defend the tax increase: “Why is it unacceptable that 91 of the country’s 500 largest corporations paid zero on federal taxes? In 2019 ”, while challenging his critics to point out any parts of this collection [fiscal] They think they deserve it. ” Biden announced this week that he would meet with Vice President Kamala Harris in the “Republicans and Democrats” in the coming weeks and that he was ready to hear the proposals of critical legislators on “hope in a good negotiation.” He reiterates his promise not to raise taxes on Americans earning less than $ 400,000 a year.

“The debate is welcome; Commitment, inevitability and change [a la propuesta presentada este miércoles]”Insurance,” he urged the president in a presentation on tax reform. Chris Goons, a close ally of Senator Fidel in the Senate, said Republicans will remain on the table for amendments until the end of May.

A week ago, when delivering the infrastructure project in Pittsburgh, Biden directly named Amazon one of those 91 companies that had avoided paying federal taxes for years. Amazon’s response was immediate, this Tuesday to its founder and CEO, In short, Jeff Bezos said the technology protects against “corporate rate hikes”..

According to a recent survey released by the US Employment Program – the name officially given to the infrastructure program, which aims to create millions of jobs while modernizing the country – has the support of 73% of voters regardless of ideological difference (57% among Republicans support it). But in Congress, where opposition to the plan is fierce, Democrats have to do what they can to convince their political rivals that he is not spending most of his funds on modernizing or building road projects such as roads or bridges. The President considers the costs of modernizing the water pipe network – with special emphasis on correcting lead pollution in many pipelines – ensuring affordable access to broadband internet, especially in rural areas.

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Following Trump’s tax reform in 2017 – the only major legislative effort of his tenure – federal revenue from corporate taxes plummeted. While they were equivalent to 2% of GDP between 2000 and 2017, they declined by 1% in 2018 and 2019, with the Organization for Economic Co-operation and Development (OECD) countries averaging 2.9% to 3.1% in the same years. Meanwhile, post-tax corporate profits increased compared to the country’s economy. It was 9.7% between 2005 and 2019, representing 5.4% of GDP during the 1980-2000 period.

“” There is little evidence to show that the cuts [de Trump] In 2017 they increased growth or productivity, ”said Commerce Secretary Gina Raimonto.“ It is true that the current corporate structure has broken down. “It is unacceptable for the Chamber of Commerce, the country’s largest business body and many others to reject this project in the first place,” the business leader explained. Lobbies Economics, which urged for discussion and debate around the White House plan.

In a rostrum published in the newspaper today The Wall Street Journal, U.S. Treasury Secretary Janet Yellen has promised that the tax increase plan will be “mutually beneficial” for the country and companies. “Tax reform is not a zero-sum game, it is for companies on the one hand and governments on the other. There are mutually beneficial, credible policies. Win-win. Washington now has something ahead, ”Yellen wrote.

Arzu Daniel

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