Democrats release details of corporate minimum tax proposal

New details of a Democratic plan to enact a 15% minimum corporate tax on declared income of large corporations were released Tuesday by three senators, Elizabeth Warren, D-Mass., Angus King, I-Maine, and Senate Finance Committee Chair Ron Wyden, D-Ore.

The senators will propose the tax be included as a source of revenue to help fund the massive “Build Back Better” bill that Democrats are currently negotiating.

Shortly after the plan was released a key senator in those negotiations, Arizona Democrat Kyrsten Sinema, announced that she would support the corporate minimum tax, giving the proposal a major boost.

According to a release from the senators, the corporate minimum tax would:

Apply only to companies that publicly report more than $1 billion in profits annually for a three year time period.
Create an across-the-board 15% minimum tax on those profits.
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.”
The tax proposal gained new focus this week after Sinema announced that she would not support raising the current corporate tax rate, which had been Democrats’ original plan to raise revenue for their social spending plan.

The tax would likely apply to about 200 American corporations, the senators said.

The Democrats did not say which business credits within the tax code would be preserved. The details of those credits would likely make a huge difference to the corporations that face the prospect of owing the tax.

According to legislative language released by Warren’s office, the Treasury Department would be tasked with determining which corporations would be subject to the tax and the finer details of its imposition.

“The most profitable corporations in the country are often the worst offenders when it comes to paying their fair share. Year after year they report record profits to shareholders and pay little to no taxes. Our proposal would tackle the most egregious corporate tax dodging by ensuring the biggest companies pay a minimum tax,” Wyden said in a statement.

They specifically referenced 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.”

The proposal has yet to get a formal stamp of approval from House and Senate leaders. But Warren said she and her colleagues have “engaged extensively” with the Senate Finance Committee, the White House and the Treasury Department to develop this updated proposal for inclusion in the Build Back Better bill.

The current proposal is similar to one pitched by President Joe Biden earlier this year as part of the White House’s broader “Made In America” tax agenda.

In March, the administration called for a 15% minimum tax on the income corporations use to report their profits to investors, known as “book” income.

The White House said at the time that such a provision would “apply only to the very largest corporations” and ensure big companies can’t “exploit loops in the tax code to get by without paying U.S. corporate taxes.”

The Biden proposal differed from the current Senate proposal in a few respects. One is that the Biden plan put the income threshold at $2 billion, not $1 billion. So the Senate proposal would apply to more companies.

Biden’s plan also did not contain a three-year rule, where the tax only applies to companies that make $1 billion or more in income for three consecutive years.

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[skeezix]

I have never understood why it is considered greed to want to keep what I’ve earned, but not greed to take what someone else has earned - Thomas Sowell

[ThunderBuddy]

Tax the corrupt career politicians first

[arthurbrown]

If you thought inflation was bad now wait until corporate taxes raise the price of everything

[zeke]

When this country is just a smouldering pile of ashes the millionaire politicians will be living it up on some distant shore

[bobbierobinson]

I wonder how fast these people can get their companies out of the country?

[Lawdawgsteve]

Step 1: All corporations work their taxes into the price of their goods.
Step 2: Taxes are going to increase on corporations according to this plan.
Step 3: Corporations will increase the price of the goods to absorb the new tax increase.
Step 4: The price of everyday goods are going to increase...a lot.
Step 5: We all will pay more for these necessary goods.
Final Step: Consumers will be the ones paying the tax increase NOT the corporations.

[zachdugan]

Who in their right mind thinks the problem is that government needs *more* of the money.

[steveference]

Still wondering why you don't see made in the USA anymore 🤔

[thiskneegrow]

Increasing taxes on business leads any of three things:
1) Increase prices of goods, making the consumer pay for the taxes
2) Firing employees/cutting hours
3) Moving business out of the country

[jimallison]

Don't believe this. They're coming after the middle class. Has anyone priced food, gas it anything else lately. Guess who’s paying for this?

[coppersworld]

Yepper, here's 200 companies that will pass the losses they suffer onto the middle class consumer.
This is not rocket science...its a stupid idea!

[Defy_Convention]

They sure have an obsession with the number 1 billion.

[thatflyguy]

How about accountability in government spending, that's where the problem lies.

[blangh]

As would be expected from a government that always spends, our government is always looking for new ways to tax.

[garywarren]

And every dime collected will be from the consumer. Corporations do not pay taxes, they collect them for the illegal spending of the government, until it is unprofitable to do so. Then they leave.

[cooperanderson]

A billion dollars in revenue...How many billions are in a trillion? And how many trillions are we spending?
How do people not see what's going on?

[foxbody]

All these companies will do is cut there work force to make up for the losses that means more unemployed people ... let’s go Brandon!!!

[noway]

All corporate tax hikes will be paid for by the middle class in the form of higher consumer prices

[brooklynsown]

We already paying for it just look at gas & food prices don’t know why they think we dumb

[CODYORMOE]

Release details? Shouldn’t “the people” get to see the whole bill? What are they hiding?