News & Events

Biden’s Budget Would Strengthen the Foundation of the U.S. Tax System 

FACT Welcomes the Proposal’s Continued Dedication to Stemming Profit Shifting and Financial Secrecy

WASHINGTON, DC – The FACT Coalition welcomed international and administrative tax reforms in the President’s proposed 2023 Budget that would continue the Administration’s efforts to discourage tax dodging by multinational corporations, and once again make the U.S. a leader in global tax transparency. 

“Now, it’s up to Congress to pass these reforms and the international tax reforms included in the Build Back Better Act,” said Ryan Gurule, FACT’s Policy Director. “Acting now can stop tax haven abuse, advance unprecedented global tax cooperation, and better equip the IRS to improve tax administration and crack down on tax dodgers.”

The budget requests rely on and build off of proposed international tax reforms included in the Build Back Better Act (H.R. 5376), which still awaits action in the Senate before it can be signed into law. Taken together, these reforms would ensure that multinational corporations headquartered and conducting business in the United States pay at least a 15 percent effective tax rate in the United States and in each country where they operate, calculated on a country-by-country basis, in furtherance of the global minimum tax agreement agreed to by 140 jurisdictions in October 2021. The Treasury estimates that these reforms would raise hundreds of billions of dollars to fund other Administration priorities such as tackling climate change, investing in infrastructure and addressing social inequities. 

The reforms would also address the secrecy currently afforded by the United States to foreign taxpayers, requiring the United States to engage in more reciprocal automatic information exchange with our allies and addressing emerging issues relating to digital assets. Finally, the reforms would continue to address the previously systematically underfunded Internal Revenue Service (IRS), boosting the agency’s funding to $14.1 billion, up from $12.6 billion provided in the 2022 omnibus that passed in March. 

“Our tax systems have been abused in recent years to enable certain actors to play by a different set of rules, robbing governments in the U.S. and around the world of the resources they need to address collective challenges,” said Ian Gary, FACT’s Executive Director. “These reforms fortify the foundation of our fiscal house by discouraging tax dodging, promoting greater transparency, and raising real revenues.”

Notes to the Editor

  • President Biden’s Budget Request for FY2023.
  • Treasury’s Green Book explaining the Revenue Proposals in the President’s FY 2023 Budget Request. 
  • Recent FACT testimony to the European Union Parliament discussing, among other things, the lack of reciprocal automatic information exchange under the U.S. tax system. 
  • Build Back Better Act as passed by the U.S. House of Representatives.  
  • OECD international tax agreement agreed to by 140 jurisdictions, and recent guidance on model rules and additional commentary for implementing Pillar 2 of the rules. 
  • Prior FACT analysis of the Build Back Better Act and included international tax reforms. 
  • Treasury revenue estimates relating to this Budget Proposal can be found here. Earlier JCT scores relating to Build Back Better can be found here. Notably, the President’s Budget formally contemplates increasing the domestic corporate tax rate to 28 percent (from 21 percent), and maintaining a reduced deduction for offshore earnings contemplated in Build Back Better under the global intangible low taxed income (GILTI) tax, resulting in a minimum rate on offshore profits equal to near 20 percent. The FACT Coalition has previously advocated for a higher GILTI rate.