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September 3, 2021 Article 5 min read

Pressure on U.S. multinationals is expected to grow as the Biden administration puts forward new tax policy proposals. In CFO, Bill Henson discusses strategies global firms can use to successfully navigate the coming changes.

Business person using a laptop computer in a coffee shop.You hear it everywhere: U.S. corporations don’t pay their fair share of taxes. They’ve hollowed out domestic industry by moving to cheaper, more tax-friendly countries. Whether or not you believe this narrative, it’s built on criticism that’s persisted for years. And now, the raft of tax policy proposals put forward by the Biden administration appears to mark the first comprehensive response.

The good news for U.S. companies with foreign operations — or those with plans to start them — is that there’s little in Biden’s “Made in America” proposals that should stop them from moving forward. If a foreign business expansion made economic sense before, it should still make sense in light of the proposed changes, even if tax bills end up being somewhat higher.

The more troubling news is that the proposals most likely to win approval are also the ones that signal a more arduous road ahead for U.S. multinationals.