Democratic presidential nominee Joe Biden is proposing a new tax penalty on companies that offshore jobs.
Biden has also revealed his support for additional tax code changes, including a reward for investments in U.S. manufacturing. (CNBC)
The tax plan is part of a broader push by the former vice president to forcefully challenge President Donald Trump on economic issues in the final two months of the presidential race.
The Biden offshoring tax proposal has three chief components:
An offshoring tax penalty: This part calls for a 28% corporate tax rate and an additional 10% “offshoring penalty surtax” on profits for manufactured goods and for services such as call centers, if American companies produce them overseas and then sell them back to the U.S. market. According to a briefing paper from the Biden campaign, “companies will pay a 30.8% tax rate on any such profits.”
A “Made in America” tax credit: A 10% advanceable tax credit for companies on a broad range of investments designed to create manufacturing jobs in the U.S. Projects that are eligible for the tax credit include revitalizing closed or closing factories, increasing domestic production, modernizing manufacturing facilities, expanding manufacturing payrolls and any expense or investment related to onshoring jobs.