Made in America Tax Plan

Tax Alert | Jonathan Gold | Apr 05, 2021

On March 31, 2021, President Biden unveiled the “Made in America Tax Plan” as part of the $2 trillion infrastructure “American Jobs Plan”.

The American Jobs Plan is an ambitious infrastructure plan primarily targeting roadways, bridges and broadband.  The majority of the funding for the infrastructure work is to be provided by the Made in America Tax Plan.

Highlights of the Made in America Tax Plan:

  • Set the Corporate Tax Rate at 28 percent – the proposal increases the corporate tax rate from 21% to 28%.  This change returns the corporate rate to its 21st century pre-2017 tax law average.
  • Increase the rate on Global Intangible Low Tax Income (GILTI) to 21% and eliminate the rule that allows U.S. companies to pay zero taxes through a deduction for the first 10 percent of return when they locate investments in foreign countries (Qualified Business Asset Investment or “QBAI).
  • Eliminate the tax incentives associated with Foreign Dividend Intangible Income (FDII) deduction.  This is aimed at driving corporations to bring R&D activities onshore.
  • Establish a 15% Minimum Tax of Large Corporations’ Book Income – this minimum tax would be imposed on the book (financial) income of corporations with revenues in excess of 100 million.
  • Increase tax enforcement on corporations and high income individuals through increasing funding of IRS.
  • Eliminate subsidies, loopholes and special foreign tax credits “tax preferences” applicable to the fossil fuel industry.

The Made in America Tax Plan is expected to provide the necessary funding to pay for the American Jobs plan over the next 15 years.