Biden Administration Proposes New Global Minimum Tax

As Bloomberg reported, the Biden administration has proposed that nations around the world implement a 15 percent global minimum tax on foreign profits. That proposed rate is lower than the 21 percent rate the administration had previously recommended. Bloomberg said the change reflects the difficulty U.S. negotiators have faced convincing countries like Ireland to agree to a tax rate that is higher than the country’s business tax rate.

According to National Association of Manufacturers Senior Director of Tax Policy David Eiselsberg, the United States already has a global minimum tax through the global intangible low-taxed income. The new proposal would hurt manufacturers’ ability to compete globally as they would face a higher rate than their competitors.

As The Wall Street Journal reported, the Treasury Department “has been pushing for an agreement as part of President Biden’s corporate tax agenda, which calls for increasing the corporate tax rate to 28 percent from 21 percent and raising taxes on U.S. companies’ foreign profits.

In related news: the U.S. Treasury Department also announced a plan to raise $700 billion in revenue by cracking down on taxpayers who owe the federal government more than they pay in tax. The department will use several strategies to close the “tax gap,” including increasing reporting requirements, giving auditors new tools, and imposing new rules on cryptocurrency. The Biden administration also wants to use the revenue to pay for its jobs and infrastructure proposals.

Read more here.