Proposed tax changes mentioned during the State of the Union Address
Last night, the President gave his first State of the Union address. Items that piqued our interest included proposed tax rates for corporations, oil, jobs, minimum wage, manufacturing and of course, the economy.
Minimum Tax Rate for Corporations in the US and Worldwide
The President stated that he proposed a 15% minimum tax rate for corporations. He also stated that 55 Fortune 500 corporations did not pay federal income tax last year. The reasoning behind the proposed minimum tax rate is to make certain corporations pay their fair share.
In addition, the President stated: “We got more than 130 countries to agree on a global minimum tax rate so companies can’t get out of paying their taxes at home by shipping jobs and factories overseas.” While no percentage was mentioned for a global minimum tax rate, we will continue to monitor this and update you when new information is released.
Releasing Barrels of Oil to Reduce Gas Prices
For everyone, the cost of gas is very relevant. During the address, the president announced that 30 million barrels of the US Strategic Petroleum Reserve would be released. This move will “help blunt gas prices here at home.” According to AAA, the national average of gas is $3.656 per gallon. In Pennsylvania, the average price is $3.79 per gallon.
Job Creation
Last year, 6.5 million new jobs were created. The President credited the American Rescue Plan for this record-breaking number. While the number of new jobs is accurate, from our perspective, recruiting skilled employees is still very difficult for many businesses. We were happy to hear the President place an emphasis on increased training and apprenticeships which will benefit the construction and manufacturing industries as well as many other industries.
Manufacturing
The President also requested Congress to pass the Bipartisan Innovation Act. The Act will make record investments in emerging technologies and American manufacturing. Of the 6.5 million jobs created in 2021; 369,000 of those jobs were new manufacturing jobs.
Minimum Wage
The President asked for the Paycheck Fairness Act to be passed. If it is passed, minimum wage would be increased to $15 an hour. Many states, such as New Jersey, already have plans in place to incrementally increase minimum wage to $15.
Child Tax Credit
The President also stated that he wants to extend the Child Tax Credit which will benefit families.
Questions?
Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.
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