President Joe Biden will propose increasing the minimum tax rates paid by major U.S. and multinational corporations to 21% and eliminating breaks for companies with high-paid executives in his election-year State of the Union address on Thursday night.
The proposal, outlined by White House officials on condition of anonymity, would affect corporations valued at $1 billion or more, raising their minimum tax rate from the 15% level implemented earlier in his term.
Biden will also ask lawmakers — as he did in last year's budget request — to impose the 21% minimum on multinational corporations, which the White House says would result in substantial new taxes on pharmaceutical companies.
He also wants to quadruple the tax companies must pay when they buy back their own stock to 4% from 1%. Democrats have proposed buyback taxes as a way to encourage companies to invest in workforces and equipment over share repurchases.
The package is part of a Biden effort to draw a contrast with the presumptive Republican nominee, former President Donald Trump, whose signature legislative accomplishment saw substantial tax cuts for the wealthy and corporations.
Much of that legislation is set to expire at the end of 2025, putting the battle over the tax code at the forefront of the coming election.
Republicans and some moderate Democrats have repeatedly voted down Biden calls to expand corporate taxes. He has previously suggested raising the corporate tax rate to 28% from 21%, a call he plans to make again Thursday.
Actual changes to the code are far off. Lawmakers are unlikely to even consider significant changes until next year, after the elections.
Executive Compensation
Biden is also requesting that Congress pass a law reducing tax deductions for any company that pays an employee more than $1 million, a move the White House estimates could raise an estimated $270 billion in revenue over 10 years.
Current rules restrict eligible deductions for employee compensation to the chief executive officer, chief financial officer and other select positions. He would also minimize tax benefits for private jet travel.
Biden would ask lawmakers to target the ultra-wealthy with a call for a 25% minimum tax on billionaires. It's designed to prevent the wealthiest Americans from using code provisions to defer or minimize their taxes.
The idea is a political longshot but popular with progressive activists, making it a rallying cry for the Democratic base.
