DEMOCRATS WANT TO RAISE CORPORATE TAXES
Democrats want to raise corporate taxes. Democrats are looking for ways to pay for the massive $2 to $3 trillion dollar infrastructure plan, that President Biden is proposing. Several members of Congress have stated that they will only support the measure if it is paid for, not through deficit spending. Given the current state of the economy, the only places to obtain additional funding are the rich, who President Biden already targeted in his election campaign, and Corporate America, who benefitted the most from the Tax Cuts and Jobs Act passed by President Trump. Negotiations started with President Biden proposing a 28% tax, from the current 21% rate, it used to be 35%, but several members of Congress have suggested a 25% rate might be easier to pass through a divided Congress. Even tax resolution companies with years of experience need to do hours of research to determine such issues. Democrats want to raise corporate taxes.
In wanting to raise hundreds of billions of dollars by taxing corporate America, changing the archaic rules that show how corporations end up filing tax returns may be challenging. It is a section of the tax system that even gives tax experts trouble, and it comes with a language that will mean nothing to lawmakers: GILTI, QBAI, earnings stripping, intangible income, Subpart F, transfer pricing, FDII, BEAT. Most members of Congress have not clue what that means and do not understand the international corporate tax system, which should make Democrats proposals easier to approve. “A lot of members don’t understand it and will not be interested in learning about it—they’ll just defer to people in the caucus they view as experts,” predicted Rohit Kumar, a former top aide to Senate Republican leader Mitch McConnell.
The complexity of the proposals, and lawmakers unfamiliarity with the international tax system, presents a challenge to opponents of the plans, including lobbyists seeking to kill or blunt the provisions. Lawmakers have long complained about their rivals voting for bills they have not read or don’t understand. But that will perhaps never be truer than with Democrats international tax changes and the tax codes that go with it. If tax experts have problems with it, how can members of Congress be expected to become experts in such a short period of time.