Washington Post economics reporter Jeff Stein on Monday delved into how taxes in President Biden’s infrastructure proposal could dramatically change how multinational corporations operate.
While appearing on Hill.TV’s “Rising,” Stein noted that former President Trump’s 2017 tax law, whether inadvertently or not, encouraged corporations to move their operations overseas.
“So there’s going to be a lot of measures in the Democratic plans … dramatically increasing what corporations pay on their overseas operations,” Stein said.
Stein also said that Treasury Secretary Janet Yellen is working with the Organisation for Economic Co-operation and Development to stop the global corporate tax rate from dropping, as it has for decades in Europe, the U.S. and Asia.
“Instead of trying to just compete with these other countries, what Yellen is trying to do is coordinate an international effort in which the globe agrees to stop this race to the bottom,” Stein said. “And the idea there is that even if the U.S. increases its corporate taxes, once that floor is enacted across the world, there will be less of an incentive for, you know, corporations… to go abroad.”
According to Stein, this plan is an “interesting inversion” of what Democrats have typically espoused, that higher taxes don’t actually cause companies to move abroad.
“Yellen is kind of implicitly acknowledging that Republicans might have a point here,” Stein said.
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