President Joe Biden on 9 March sent Congress an FY 2024 budget that proposes to increase taxes for corporations and for individuals with incomes above $400,000 as part of a plan intended to reduce federal budget deficits by $2.858 trillion over 10 years.
Key business tax provisions in the FY 2024 budget include a proposal to increase the US corporate income tax rate from 21% to 28%, and proposed reforms to US international tax rules that include raising the tax rate on the foreign earnings of US multinational corporations from 10.5% to 21% and adopting an undertaxed profits rule. The budget also proposes “additional support” for research and experimentation expenditures using revenue raised by repealing the deduction for foreign-derived intangible income (FDII). As previously announced, the President’s budget proposes to increase from 1% to 4% the corporate stock repurchase excise tax that was enacted as part of the 2022 Inflation Reduction Act. The budget also includes other tax proposals that would affect corporate and pass-through businesses.