The Joe Biden administration has unveiled the United States's new corporate tax plan, raising the levy from the current 21 percent to 28 percent. This comes after Biden's last week proposal worth $2.2-trillion to upgrade the US roads, bridges, broadband, and clean energy infrastructure.

The ‘Made in America Tax Plan’ brings in corporate tax reforms to address profit shifting and offshoring incentives, the US Department of the Treasury said in its report earlier this week.

President Biden's plan to tax the corporates more is expected to rake in $2.5 trillion over 15 years to fund the infrastructure proposal and at the same time encourage other countries to enact a global minimum tax.

According to NBC News, Biden, in his Wednesday speech, said his plan was fairer to the country's middle class. The message is likely to find acceptance among the targeted section, for people in the US have largely been in support of a tax regime that taxes retail, technology, manufacturing, and finance behemoths more.

In fact, 60 percent of Americans, in a recent survey by data firm Morning Consult, said the corporates should pay more and almost 33 percent of that surveyed agreed with "higher taxes" for companies.

The new plan also enacts a 15 percent minimum tax on book income of huge companies that report high profits, but have little taxable income. This part of the new plan has been designed specifically to deal with companies that paid nothing in federal taxes last year despite making billions.

The Institute on Taxation and Economic Policy, in its report, said that at least 55 of the largest corporations in America paid no federal corporate income taxes in their most recent fiscal year despite collectively making $40.5 billion in pre-tax income.

The ‘Made in America Tax Plan’ also replaces fossil fuel subsidies with incentives for clean energy production.

Most importantly, the US Treasury, as a part of the new plan, is focused on ramping up the enforcement to ensure there is no corporate tax avoidance.

Biden's predecessor Donald Trump had, in 2017, reduced the corporate tax rate from 35 percent to 21 percent. The decision was aimed at discouraging multinational companies from offshore profits to avoid taxes in the US.

The Treasury Department said the decision to significantly slash corporate tax did not show an increase in investment or economic growth from trend levels, with one analysis concluding that “there is no evidence that the 2017 tax law has made a substantial contribution to investment or longer-term economic growth".

(Edited by : Ajay Vaishnav)