Corporate minimum tax proposal unveiled by key Senate Democrats
Mandel Ngan | Pool | Reuters
WASHINGTON – Three senators released new details Tuesday about a Democratic plan for enacting a minimum 15% corporate tax on the declared income of large corporations. They were Elizabeth Warren (Mass.), Angus King (Maine), and Ron Wyden (Ore.)
Senators propose that the tax is included in the revenue stream to fund the huge “Build Back Better” bill, which Democrats are currently trying to negotiate.
The senators released a statement stating that the corporate minimum tax Could:
- This applies only to public companies reporting more than $1B in annual profits over three-year periods.
- These profits should be subject to a 15% minimum tax.
- Preserve “the value of business credits – including R&D, clean energy, and housing tax credits – and include some flexibilities for companies to carry forward losses, utilize foreign tax credits, and claim a minimum tax credit against regular tax in future years.”
This week, the tax proposal was brought to a new light by Arizona Senator Kyrsten Silena’s announcement that she won’t support raising the current corporate rate. That had been Democrats original plan for increasing revenue for their social spending program.
Senators stated that the tax will likely be applied to approximately 200 American businesses.
The Democrats have not stated which tax credits for business would be retained. It is likely that the specifics of the credits will make a significant difference for corporations facing the possibility of having to pay the tax.
According to legislative languageWarren’s Office released the following information: It appears the Treasury Secretary would have to determine which credits are eligible.
The worst tax payers are the most successful corporations. Each year, they make record profits and pay minimal taxes. Wyden stated that his proposal was to tackle corporate tax dodging at its worst by making sure the largest companies pay the minimum tax.
You specifically refer to them Amazon, which they said reported $45 billion in profits over the past three years, yet paid an “effective tax rate of just 4.3% – well below the 21% corporate tax rate.”
House and Senate leaders still have not approved the formal proposal. Warren acknowledged that her and her coworkers had “engaged extensively” in discussions with Senate Finance Committee and White House officials to produce the updated proposal, which will be included in the Build back Better bill.
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