Biden Proposes a Tax Penalty for Offshoring and New Credits For Manufacturing Investments



Christina Wilkie | CNBC

WASHINGTON — Democratic presidential nominee Joe Biden will travel to the battleground state of Michigan on Wednesday to propose changes to the corporate tax code to reward investments in U.S.-based manufacturing and penalize American companies that offshore jobs.

The tax plan is part of a broader push by the former vice president to forcefully challenge President Donald Trump on economic issues in the final two months of the presidential race.

The proposal has three chief components:

  1. ​An offshoring tax penalty​: This part 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.”
  2. 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 projects include revitalizing closed or closing factories, increasing domestic production, modernizing manufacturing facilities, expanding manufacturing payrolls and any expense or investment related to onshoring jobs.
  3. 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.

To read the full article, click here