Biden unveils offshoring tax plan

Tax Hot Topics newsletter Democratic presidential nominee Joe Biden has introduced a series of tax proposals aimed at bringing jobs and production back to the United States and curbing offshoring.

The plan includes a new offshoring penalty on profits of U.S. companies from overseas production for domestic sale. The penalty is effectively a 2.8% surtax, bumping up the rate on applicable profits to 30.8% under Biden’s proposed 28% corporate tax rate. The plan would also provide a 10% advanceable tax credit to promote U.S. production, restructure GILTI as a 21% global minimum tax on all earnings that applies separately to each country, implement “strong anti-inversion regulations and penalties” and deny deductions for “moving jobs and production overseas.”

With just over 40 days until the 2020 election, Biden has continued to make tax policy a focal point of his campaign. While many of his proposals are ambitious and unlikely to be enacted in their current form, Biden’s robust tax platform suggests that tax reform could be among the top priorities on his policy agenda if he’s elected. For more details on the tax plans of both presidential candidates, including a side-by-side comparison, see our story, ‘Taxes take center stage in the 2020 election.’

Dustin Stamper
Managing Director
Washington National Tax Office
T  +1 202 861 4144

Omair Taher
Washington National Tax Office
T  +1 202 861 4143

Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.