Treasury Department Releases Details of the Made In America Tax Plan

Brownstein Hyatt Farber Schreck

On April 7, 2021, the Treasury Department released a report, the Made in America Tax Plan, which describes the proposed changes to corporate and international law that President Biden outlined in his infrastructure package, the American Jobs Plan. The report notes the plan aims to direct 1% of GDP toward infrastructure, clean energy and the economy over eight years.

The report includes details on the major elements of President Biden’s Made in America Tax Plan, outlined below. President Biden believes these proposals will make companies more competitive by ensuring that U.S. multinationals are globally competitive but also pay their fair share of corporate taxes. The plan also provides tax preferences for clean energy production and generates new funding for investment in infrastructure, research and manufacturing, driving job creation in these industries. The tax proposals outlined by the plan are intended to fully pay for the investments in the American Jobs Plan over a 15-year period.

The release of the Treasury Department report comes on the heels of Senate Finance Committee Chair Ron Wyden‘s (D-OR) release of his own infrastructure framework. There are differences in the approach outlined by Wyden and the administration, including key proposals, such as a minimum tax on corporations, that seem to be outside the scope of the Wyden framework.

The Brownstein tax team will provide an in-depth analysis in the coming days of the Made in America Tax Plan, including details on how it compares to the Wyden framework.

Major Proposals in the Made in America Tax Plan:

  • Raise the corporate income tax rate to 28%;
  • Strengthen the global minimum tax for U.S. multinational corporations;
  • Encourage global adoption of robust minimum taxes;
  • Enact a 15% minimum tax on book income of large companies that report high profits, but have little taxable income;
  • Replace incentives that reward excess profits from intangible assets with more generous incentives for new research and development;
  • Replace fossil fuel subsidies with incentives for clean energy production; and
  • Enhance enforcement to address corporate tax avoidance.

The Made in America Tax Plan is based on the following principles:

  • Collecting sufficient revenue to fund critical investments;
  • Building a fairer tax system that rewards labor;
  • Reducing profit shifting and eliminating incentives to offshore investments;
  • Ending the race to the bottom around the world;
  • Requiring all corporations to pay their fair share; and
  • Building a resilient economy to compete.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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