The tax plan President Joe Biden laid out last week will likely hit technology and pharmaceutical companies particularly hard, although the challenge for legislators will be to minimize loopholes that could diminish the impact, tax experts said.
Many of the most valuable assets at pharmaceutical and tech companies are intellectual property (IP), like patents and algorithms—intangibles that make it easier for them to structure global operations in a way to minimize tax costs. Sectors like retail or agriculture have lots of physical assets that can't easily be moved to lower-tax countries.
Both Republicans and Democrats have sought to bolster the U.S. tax take from companies' overseas operations, and President Donald Trump's 2017 overhaul did have measures to do that. Biden's plan takes a tougher approach, with a 21 percent minimum tax on foreign profits and a 15 percent minimum levy on profits reported on financial statements. It limits companies from using credits for research and development costs and deductions for paying employees in stock.
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