Joe Biden Proposes Tax Penalty for Offshoring, Would Reward Investments in U.S.
Democratic presidential nominee Joe Biden was expected to propose changes to the corporate tax code today in Michigan, suggesting rewards for investments in U.S.-based manufacturing and penalties for American companies that offshore jobs.
The tax plan is part of the former vice president’s plan to forcefully challenge President Donald Trump on economic issues in the final two months of the presidential race, according to CNBC.
Biden’s proposal includes three main elements:
- An offshoring tax penalty: This calls for a 28% corporate tax rate and an additional 10% “offshoring penalty surtax” on profits for manufactured goods and for services such as call centers, if American companies produce them overseas and then sell them back to the U.S. market. According to a briefing paper from the Biden campaign, “companies will pay a 30.8% tax rate on any such profits.”
- A “Made in America” tax credit: A 10% advanceable tax credit for companies on a broad range of investments designed to create manufacturing jobs in the United States. Eligible products include revitalizing closed or closing factories, increasing domestic production, modernizing manufacturing facilities, expanding manufacturing payrolls and any expense or investment related to onshoring jobs.
- Elimination of offshore tax loopholes: Biden’s plan would close several tax loopholes in the 2017 Republican tax law that permit U.S. companies to shield their foreign profits from full taxation.