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1 Alex Durante, et al., Details and Analysis of President Biden's American Jobs Plan 1 (2021)

handle is hein.taxfoundation/dsadas0001 and id is 1 raw text is: Details and Analysis of President Biden's American Jobs Plan FISCAL FACT No. 767 June 2021 Alex Durante Cody Kallen Huaqun Li William McBride Federal Tax Economist Resident Fellow Senior Economist Vice President of Federal Tax and Economic Policy The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy at the federal, state, and global levels. We are a 501(c)(3) nonproht organization. ©2021 Tax Foundation Distributed under Creative Commons CC-BY-NC 4.0 Editor, Rachel Shuster Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 taxfoundation.org The Biden administration's proposed American Jobs Plan (AJP) would increase federal spending by about $2.2 trillion over 10 years, including $1.7 trillion for infrastructure, partially funded with permanently higher corporate taxes of about $1.7 trillion over 10 years (conventionally estimated). Using the Tax Foundation General Equilibrium Model, we find that the combined effects of the tax changes and spending would reduce U.S. gross domestic product (GDP) in the long run by 0.5 percent and result in 101,000 fewer U.S. jobs. TABLE 1. Combined Long-Run Effects of Changes in Tax and Spending in the American Jobs Plan Gross Domestic Product (GDP) -0.5% Gross National Product (GNP) -0.3% Capital Stock -1.3% Wage Rate -0.5% Full-Time Equivalent Jobs -101,000 Source: Tax Foundation General Equilibrium Model, May 2021. Major Tax Changes in the American Jobs Plan The American Jobs Plan would include the following major tax changes: Raise the federal statutory corporate tax rate from 21 percent to 28 percent. Raise the tax on Global Intangible Low Tax Income (GILTI) from 10 percent to 21 percent, calculate GILTI on a per-country basis, and eliminate the exemption of the first 10 percent return on foreign qualified business asset investment (QBAI). Repeal the foreign derived intangible income (FDII) deduction. Impose a 15 percent minimum tax on corporate book income for firms with over $2 billion in net income.

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