Democratic presidential nominee Joe Biden is expected to unveil a new push to fight offshoring through a combination of incentives and penalties.
Biden’s bid, which his adviser said he will announce as he visits the battleground state of Michigan, is to include a proposal to tax companies that offshore and to offer incentives for them to invest in operations in America. His adviser said Biden will, during his visit to the Detroit suburb of Warren on Wednesday, pitch an “offshoring tax penalty” on profits from products made overseas and sold in the United States. Having already floated the idea of increasing the corporate tax rate from 21 percent to 28 percent, Biden’s new plan would tax profits from offshore operations at a rate of 30.8 percent.
As an incentive to reshore, Biden would give a 10 percent tax credit for companies that reopen facilities that have been shut down or are closing. Other corporate actions that would qualify for an incentive include expanding domestic manufacturing payroll and refurbishing plants to improve competitiveness and boost employment in the manufacturing industry, The Hill reports.
During his visit to Michigan, a must-win state that Democrats narrowly lost in 2016, Biden is also expected to detail some executive orders he would take as president that would ensure the government buys more products that are American-made.
The plan is part of a broader Biden strategy to hone in on economic matters, which have tended to be President Donald Trump’s strong suit. While Trump’s approval on the economy fell as the outbreak of the Chinese Communist Party (CCP) virus drove lockdowns and historic job losses, the downward trend bottomed in early August and the president’s approval on the economy has since been on the rise.
Trump, along with economic experts in his administration like Larry Kudlow, have repeatedly touted the dynamics of the post-outbreak economic rebound across a number of measures, including retail sales, factory numbers, and the stock market. While lagging in the hardest-hit industries like travel and entertainment and with still around 10 million fewer jobs in the economy than before the outbreak, the rebound has, on the whole, been sharp. Recent Labor Department figures show (pdf) that the U.S. economy added 1.4 million jobs in August, which comes on the back of jobs rising by 1.8 million in July, 4.8 million in June, and 2.5 million in May, bringing the total jobs created in the past 4 months to a record 10.5 million. Two of the three major Wall Street stock indexes have recovered all their pandemic losses and are now trading close to their all-time highs.
Biden has attacked Trump on the economy, claiming the president has focused on corporate welfare and tax cuts for the wealthy instead of helping ordinary Americans.
“The truth is throughout this crisis, Donald Trump has been almost singularly focused on the stock market, the Dow and NASDAQ, not you, not your families,” Biden said in a speech on July 9. “If I am fortunate enough to be elected president, I’ll be laser focused on working families,” he added. In recent months, Biden has unveiled a sweeping economic recovery agenda he calls “Build Back Better,” which calls for a multitrillion-dollar investment in manufacturing, infrastructure, caregiving, and the environment.
Trump has said on numerous occasions that, under a Biden administration, America’s economy would suffer.
“If I’m reelected, we will create 10 million jobs over the next 10 months, and we’ll do that easily,” Trump said at a recent rally in New Hampshire, adding that Biden’s agenda of “big tax increases and big regulation increases will immediately kill everything.”
Trump is expected to visit battlegrounds Michigan and Pennsylvania later in the week.