President Barack Obama will propose that U.S.-based companies pay a minimum 19 percent tax on their future foreign earnings, capturing profits that are now often beyond the government’s reach.
Obama will also seek a 14 percent mandatory tax on about $2 trillion in stockpiled offshore profits, said two people familiar with his budget proposals, declining to be
named because the document won’t be made public until Feb. 2. Companies would pay that tax regardless of whether they bring the money back to the U.S., the two said, creating a revenue stream the president would use to pay for roads, bridges and other infrastructure projects.
Obama’s latest proposals add new details to the administration’s efforts to revamp the U.S. business tax system. The issue has been stalled in Congress, though lawmakers of both parties say they see potential room for agreement on business taxes.
In one sense, Obama is offering U.S. companies the kind of system they have sought — one with lower corporate marginal tax rates and with future foreign profits subject to little or no extra U.S. tax when brought home.