DEMOCRATS EFFORTS TO RAISE CORPORATE TAXES
May 3, 2021 - Douglas Myser
Democrats efforts to raise corporate taxes. In changing the complicated corporate tax code, several members of Congress have had to rely on tax experts for advice on certain aspects of the tax code. Many parts of that code need revision, to stop Corporate America from paying less than what they should. Public opinion in recent years has turned as little evidence of jobs creation has accompanied the Republican claim that lowering Corporate taxes will create massive jobs growth. It hasn't. Democrats want to revamp or thrown out an export derivative known as foreign derived intangible income, or FDII, sometimes called Fiddy. And Democrats are proposing to rewrite or kill another special tax called BEAT, which was designed to go after companies that reduce their tax bills by booking lots of deductions in the U.S. while declaring they made most of their profits in foreign affiliates that are beyond the jurisdiction of the IRS. The BEAT, or base erosion and anti-abuse tax, hasn't worked out like lawmakers intended, raising a fraction of the revenue policymakers had anticipated. The Administration proposed replacing it with a new tax it dubbed SHIELD that Treasury officials said would do a better job of combating offshore tax avoidance. Democrats efforts to raise corporate taxes.
The proposals will require a big education campaign on Capital Hill just to get across the basic concepts, and lawmakers in both parties have begun preparing for debate over the provisions. Every vote will potentially matter because of Democrats tiny majorities in the House and Senate. Democrats acknowledge the complexity of their proposals but say they are trying to give colleagues enough time to get up to speed on the issues. "It is really Byzantine and you have to reconcile this section and that section and that's why we're starting early and we're starting with some pretty straightforward concepts," said Wyden. Their easier to digest roadmap on the proposals boils down to one word: outsourcing. "Republicans in Congress gave corporations essentially a 50% off coupon on their taxes if they move production overseas," said Sen. Sherrod Brown D-Ohio, another tax writer.