- Economists are predicting that former Vice President Joe Biden’s economic agenda would not lead to job growth due to tax hikes.
- “Biden’s proposals would overall discourage investment in the U.S. rather than the other way around,” one economist said.
- In addition to tax hikes, Mr. Biden has proposed a massive spending agenda with few ways to pay for it.
Biden tax hikes would undercut his ‘Made in America’ plan, economists warn
By Nihal Krishan
Oct. 19, 2020
Joe Biden’s ‘Made in America’ plan may not bring back as many jobs as the campaign expects because of corporate tax increases in other parts of his agenda.
By imposing a minimum tax on corporations with certain earnings and increasing the corporate income tax, Biden’s plan to incentivize companies to invest and bring jobs back to the United States could be erased in part or completely, right-leaning economic analysts say.
“If a company has to pay the minimum tax, that could disincentivize them from utilizing his Made in America tax credit,” said Garrett Watson, an economist at the Tax Foundation, a center-right think tank.
“It’s basically a tax floor, so if you’re beneath that floor, his plan doesn’t help you much. It’s focused more on sticks rather than carrots,” said Watson.
At the same time, Biden, as part of his broader tax agenda, would increase the corporate income tax rate to 28% from 21%, create a minimum tax on corporations with book profits of $100 million or higher, and double the tax rate on Global Intangible Low Tax Income earned by foreign subsidiaries of U.S. firms to 21% from 10.5%.
Overall, Biden’s tax agenda would increase the tax burden on most U.S. companies with foreign operations, and so the benefits of his ‘Made in America’ plan would thereby be significantly diminished, some economists said.
“Biden’s proposals would overall discourage investment in the U.S. rather than the other way around,” said Kyle Pomerleau, an economist at the American Enterprise Institute, a right-of-center think tank. …
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