WASHINGTON (Reuters) -The Biden administration’s proposals to raise taxes on corporations and wealthy Americans would boost U.S. revenues by a net $2.4 trillion over a decade, after hefty tax deductions and credits to support clean energy, children and families, the Treasury said on Friday.
The Treasury said that corporate tax hike proposals, including new global minimum taxes, would lift revenues by $2.035 trillion over a decade, including $98 billion in fiscal 2022 and $195.7 billion in fiscal 2023. The estimates were contained in the Treasury’s revenue “Green Book” that accompanied Biden’s $6 trillion overall budget proposal
The document provided additional details on proposals such as a new global minimum tax, for which the Treasury sees strong support among G7 countries.
The Treasury said that replacing a 10% minimum tax with a 21% version known as the “Stopping Harmful Inversions and Ending Low-Tax Developments” (SHIELD) rule — aimed at deterring companies from moving assets to tax-haven countries — would raise $390 billion in new revenue over a decade.
But the Treasury document said that the SHIELD tax would not be launched until Jan. 1, 2023, under the proposal, which imposes the tax on companies doing business in countries that do not agree on a global minimum corporate tax.
Manal Corwin, head of KPMG’s Washington National Tax practice, said that the delay would allow more time for a global minimum rate to be agreed, adding that the details “continue to show U.S. commitment to a global minimum tax.”
Proposals to shift tax subsidies from fossil fuels to renewable energy and support development of electric vehicles would eat into the revenue gains, reducing them by $302.9 billion over a decade, the Treasury said.
Biden’s plan to raise tax rates for the highest-income tax payers and increase capital gains taxes on those earning more than $1 million a year would raise $690 billion over a decade, while expanding tax credits for children and child care would reduce revenues by $821.8 billion over a decade, according to the Treasury estimates.