I just read a WSJ article that takes from some campaigning he's done in the rust belt. He's explained some more of his proposed industrial policy.
"Democratic presidential candidate Joe Biden called Wednesday for higher taxes on U.S. companies’ foreign income and special tax breaks for domestic manufacturing, appealing to blue-collar workers during a trip to Michigan.
Mr. Biden would impose a new surtax on U.S. companies that make products overseas and sell back into the U.S. He would also raise the minimum taxes on U.S. companies’ foreign income and offer a 10% tax credit for certain investments in domestic production.
The new tax proposals would broaden the U.S. tax code’s global reach, marking a return toward the international tax system that was in existence before the 2017 law. Mr. Biden argues that Mr. Trump gave U.S. companies so steep a discount that they have incentives to operate abroad rather than in the U.S. He had already called for raising the U.S. tax rate to 28% from 21% and setting the minimum tax on foreign profits at 21%, up from 10.5%. The new proposals announced Wednesday go further, changing the structure of the minimum tax to make companies pay more.
The U.S. rate was cut to 21% from 35%, making it more in line with other major industrialized countries and reducing the potential gains from cross-border profit shifting. On foreign income, U.S. companies generally face a residual U.S. tax if their foreign taxes are relatively low; if they pay nothing abroad, they pay a 10.5% rate to the U.S. That minimum tax is based on companies’ total non-U.S. tax rates, after excluding an amount equal to 10% of tangible assets.
Mr. Biden would no longer let companies exclude that 10%, and he would apply the minimum tax on a country-by-country basis. That country-by-country rule means that U.S. companies could no longer avoid the minimum tax by blending profits in low-tax jurisdictions such as Ireland with profits in high-tax jurisdictions such as Germany.
Before the 2017 law, U.S. companies owed a 35% U.S. tax on their world-wide income. They could get credits for foreign taxes paid and defer any remaining U.S. taxes until they brought their profits home. That system created incentives to shift profits into low-tax jurisdictions and leave them there. Still, U.S.-based companies argued that those rules made it hard for them to compete in foreign markets, because they faced potential levies that their non-U.S. competitors didn’t.
The 2017 tax law tried to reduce tax avoidance while also helping U.S. companies compete abroad, said George Callas, who was an aide to then-House Speaker Paul Ryan (R., Wis.) when the law was written. The result was a narrower tax disparity between profits earned in the U.S. and profits booked abroad.
But the 2017 law still left too many opportunities for tax avoidance, said Kimberly Clausing, an economist at Reed College who has volunteered to help the Biden campaign with policy.
In addition, Mr. Biden would impose a 10% “offshoring tax penalty” on the profits made by U.S. companies abroad for sales back to the U.S. That could be challenging to administer and would need further details.
Because many of these changes affect only U.S.-based companies, there would be a new premium on having a foreign headquarters. Mr. Biden’s plan includes curbs on inversion deals that let companies shift their addresses. Still, the advantages of having a foreign headquarters could make some U.S. firms targets for takeovers.
In addition to the tax increase, Mr. Biden is proposing incentives that would lower taxes for domestic companies. Mr. Biden’s proposed 10% tax credit for certain investments in domestic production aims to give companies an incentive to retool factories or bring jobs into the country."
Biden Pushes Higher Taxes on U.S. Companies’ Foreign Profits in Pitch to Midwest Voters - WSJ
"Democratic presidential candidate Joe Biden called Wednesday for higher taxes on U.S. companies’ foreign income and special tax breaks for domestic manufacturing, appealing to blue-collar workers during a trip to Michigan.
Mr. Biden would impose a new surtax on U.S. companies that make products overseas and sell back into the U.S. He would also raise the minimum taxes on U.S. companies’ foreign income and offer a 10% tax credit for certain investments in domestic production.
The new tax proposals would broaden the U.S. tax code’s global reach, marking a return toward the international tax system that was in existence before the 2017 law. Mr. Biden argues that Mr. Trump gave U.S. companies so steep a discount that they have incentives to operate abroad rather than in the U.S. He had already called for raising the U.S. tax rate to 28% from 21% and setting the minimum tax on foreign profits at 21%, up from 10.5%. The new proposals announced Wednesday go further, changing the structure of the minimum tax to make companies pay more.
The U.S. rate was cut to 21% from 35%, making it more in line with other major industrialized countries and reducing the potential gains from cross-border profit shifting. On foreign income, U.S. companies generally face a residual U.S. tax if their foreign taxes are relatively low; if they pay nothing abroad, they pay a 10.5% rate to the U.S. That minimum tax is based on companies’ total non-U.S. tax rates, after excluding an amount equal to 10% of tangible assets.
Mr. Biden would no longer let companies exclude that 10%, and he would apply the minimum tax on a country-by-country basis. That country-by-country rule means that U.S. companies could no longer avoid the minimum tax by blending profits in low-tax jurisdictions such as Ireland with profits in high-tax jurisdictions such as Germany.
Before the 2017 law, U.S. companies owed a 35% U.S. tax on their world-wide income. They could get credits for foreign taxes paid and defer any remaining U.S. taxes until they brought their profits home. That system created incentives to shift profits into low-tax jurisdictions and leave them there. Still, U.S.-based companies argued that those rules made it hard for them to compete in foreign markets, because they faced potential levies that their non-U.S. competitors didn’t.
The 2017 tax law tried to reduce tax avoidance while also helping U.S. companies compete abroad, said George Callas, who was an aide to then-House Speaker Paul Ryan (R., Wis.) when the law was written. The result was a narrower tax disparity between profits earned in the U.S. and profits booked abroad.
But the 2017 law still left too many opportunities for tax avoidance, said Kimberly Clausing, an economist at Reed College who has volunteered to help the Biden campaign with policy.
In addition, Mr. Biden would impose a 10% “offshoring tax penalty” on the profits made by U.S. companies abroad for sales back to the U.S. That could be challenging to administer and would need further details.
Because many of these changes affect only U.S.-based companies, there would be a new premium on having a foreign headquarters. Mr. Biden’s plan includes curbs on inversion deals that let companies shift their addresses. Still, the advantages of having a foreign headquarters could make some U.S. firms targets for takeovers.
In addition to the tax increase, Mr. Biden is proposing incentives that would lower taxes for domestic companies. Mr. Biden’s proposed 10% tax credit for certain investments in domestic production aims to give companies an incentive to retool factories or bring jobs into the country."
Biden Pushes Higher Taxes on U.S. Companies’ Foreign Profits in Pitch to Midwest Voters - WSJ