Top Pro & Con Arguments


Raising the corporate income tax rate would force companies to invest in the United States, rather than overseas.

The overseas corporate tax rate (GILTI: Global Intangible Low-Tax Income) enacted in 2017 requires corporations to pay just 10.5% on overseas profits. By raising that rate to at least 21%, “the new minimum tax would be calculated on a country-by-country basis rather than on a global average, which would prevent companies from exploiting tax havens to drive their average rate down to the minimum—and eliminate a potential incentive to locate operations in high-tax foreign countries, rather than the United States, if the companies’ average foreign tax rate is below the minimum,” according to experts at the Center for American Progress. [78]

Itai Grinberg, Deputy Assistant Secretary for Multilateral Tax, and Rebecca Kysar, Counselor to the Assistant Secretary for Tax Policy, both of the US Treasury Department, argue that “[u]nder current law, U.S. multinational corporations face only a 10.5% minimum tax on their foreign earnings, half the rate that they pay on their domestic earnings, incentivizing them to operate and shift profits abroad… The Made in America Tax Plan would increase the minimum tax on corporate foreign earnings to 21%, reducing a corporation’s incentives to shift profits and jobs abroad… Under current law, companies have large tax incentives to put activities and earnings offshore; a strong minimum tax can reduce that tax distortion, favoring activity and earnings at home.” [77]

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