Here's how President-elect Joe Biden's corporate tax plan will impact big businesses
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- President-elect Joe Biden, who Insider and Decision Desk HQ project will get the 270 votes to secure the White House, said he would like to raise taxes on big corporations.
- Biden pledged to raise the corporate tax rate to 28%, higher than the current rate, but lower than the one before Trump took office.
- Biden's proposed tax plan could raise federal revenues by $2.4 trillion in the next decade, think tanks Urban Institute and Brookings estimated.
- Biden has also said he would eliminate tax loopholes that allow billion-dollar companies like Amazon to pay zero in federal taxes.
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US companies might pay more in federal taxes under a projected Joe Biden presidency.
President-elect Biden, who Insider and Decision Desk HQ project will get the 270 electoral votes necessary to secure the White House, told CNN in September he will roll back Trump's corporate tax cuts on "day one" of his presidency.
Biden pledged to raise the corporate tax rate to 28% from 21% and impose a 15% minimum tax on income to ensure each company pays taxes. The tax rate will not be as high as it was prior to Trump, 35%, but matches the proposed tax rate of former president Barack Obama.
Biden's proposed tax plan could raise federal revenues by $2.4 trillion in the next decade, think tanks Urban Institute and Brookings estimate.
But even with an increased tax rate, big companies could still manage to pay $0 in federal taxes due to tax code loopholes and tax breaks. Under President Donald Trump, an analysis by NBC News and the nonprofit Center for Public Integrity found twice as many big companies — including Amazon, Netflix and Chevron — paid $0 in taxes in 2018.
Another analysis, conducted by the nonpartisan Institute on Taxation and Economic Policy, found that after Trump lowered the corporate tax rate to 21% from 35% in 2017, the average federal tax rate plummeted to 11.3% for about 400 large companies in 2018, tumbling to a 40-year low.
Biden has proposed eliminating Trump's tax loopholes to keep companies from getting fully taxed for foreign profits. In an interview with CNBC, Biden said billion-dollar companies like Amazon should not pay zero dollars in taxes.
"I think Amazon should start paying their taxes," Biden told Andrew Ross Sorkin. "I don't think any company, I don't give a damn how big they are, the Lord Almighty, should absolutely be in a position where they pay no tax and make billions and billions and billions of dollars."
Trump said the Tax Cuts and Jobs Act would reduce the federal deficit and spur GDP growth. But GDP growth slowed in 2019 due to Trump's trade wars overseas, and the deficit has increased.
Business Insider's Joe Ciolli reported companies benefiting the most from the plan were those that paid the most taxes and those with cash stored overseas.
Jobs, too, suffered a major hit under Trump's presidency. Job growth declined in nearly every industry with the onslaught of the COVID-19 pandemic. The most recent Bureau of Labor Statistics jobs report indicates jobs recovery has slowed since June, as employment remains 10 million jobs short of the pre-COVID figure. Economists say the GDP, which shrunk by 31.4% after pandemic-related business shutdowns, may take years to rebound.
But policies Biden proposed on the campaign trail — including giving families with children monthly payments, boosting unemployment benefits, and another round of direct payments for all taxpayers — could put cash in more American hands, boosting spending and the overall economy.
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