Companies in New York and around the country will face higher tax bills if a $2 trillion infrastructure plan unveiled by the Biden administration on March 31 is approved by Congress. President Biden says that the country’s crumbling roads, bridges, airports and power grids must be improved if the United States is to remain competitive on the global stage, and the president wants to pay for his ambitious spending plan by raising the corporate tax rate from 21% to 28%.
Lawmakers on both sides of the political aisle support an infrastructure initiative, but support for Biden’s plan is unlikely to be bipartisan. Republicans rarely support tax increases, and several members of the GOP caucus have already said they plan to oppose the president’s Made in America Tax Plan because it includes money to fight climate change and fund social justice initiatives as well as improve the nation’s infrastructure. In addition to raising the corporate tax rate, Biden’s plan would eliminate a rule that allows companies to reduce the amount of tax they pay by investing overseas.
Business as well as political leaders oppose the proposed corporate tax rate increase. When a group of CEOs including the chief executives of Apple and Amazon were asked about the president’s plan, 98% of them said that the proposed tax increase would negatively impact their ability to develop new products and compete in global markets. Supporters of the infrastructure plan are unlikely to be swayed by these arguments as many of the country’s largest corporations pay little or no tax. A report released on April 2 by the Institute on Taxation and Economic Policy revealed that 55 of America’s largest companies paid no tax in 2017 despite earning billions in profits.
Business and tax law
Corporate tax laws are written to encourage investment as well as raise revenue. When these laws are revised, attorneys with business law experience could help entrepreneurs and executives to minimize their exposure and identify new opportunities. Attorneys could also review existing legal and financial policies to see if changes are needed to comply with new rules and regulations.