The administration of U.S. President Joe Biden has unveiled a plan to raise $2.5 trillion U.S. through additional tax measures.
The plan proposes to overhaul the U.S. corporate tax code, offering several proposals that would require large companies to pay higher taxes to help fund the White House’s economic agenda and infrastructure program.
The plan, if enacted, would raise $2.5 trillion U.S. in additional revenue over 15 years. It would do so by making major changes for American companies, which have long embraced loopholes in the tax code that allowed them to lower or eliminate their tax liability.
The tax plan also includes efforts to combat climate change, proposing to replace fossil fuel subsidies with tax incentives that promote clean energy production.
The plan, officially unveiled by the U.S. Treasury Department, would raise the American corporate tax rate to 28% from 21%. The Biden administration said the increase would bring America’s corporate tax rate in line with other advanced economies and reduce inequality. It would also remain lower than it was before the 2017 Trump tax cuts, when the rate stood at 35%.
The White House also proposed significant changes to several international tax provisions included in the Trump tax cuts. Among the biggest changes would be a doubling of the global minimum tax rate to 21% and toughening it to force companies to pay the tax on a wider span of income across various countries.