Democrats are running out of options to fund their shrinking reconciliation bill. Sen. Elizabeth Warren (D.Massachusetts), one of the key senators, has introduced a bill that would require large corporations to pay a minimum tax rate. This would prevent companies exploitation of the tax system to pay either a negative or zero effective rate.
The Minimum Tax on Corporate Profits would levy a 15 percent minimum tax on profits over $1 billion based on profits that the corporations report to the shareholders, or book profits — rather than profits that corporations report to the government, which they often deflateTo avoid higher taxes. The tax would apply to around 200 companies and could raise hundreds if not billions for the government in the next decade, according to the lawmakers.
The statutory corporate tax rate of 21 percent, hacked down from 35 percent by Republicans in 2017, wouldn’t be affected by this proposal. Senator Kyrsten Sinema (D. Arizona) has fought against increasing the corporate tax rate. Close relationshipsContact conservative lobby groups and corporations
“Giant corporations have been exploiting tax loopholes for too long, and it’s about time they pay their fair share to help run this country, just like everyone else,” said Warren. “The Corporate Profits Minimum Tax would end corporate double dealing and ensure companies pay something in taxes when they report billions in profits to their shareholders.”
Sen. Angus King (I.Maine), co-introducer of Bill, stressed that corporations should play a greater part in funding the government. “In 1965, corporations paid roughly 4 percent of the nation’s GDP in state and federal income tax. Today, that rate is only 1 percent,” King said. “This massive decline has contributed to the nation’s rising debt and threatened basic public sector services Americans rely upon.”
The bill is identical to A proposalWarren introduced earlier in the year a 7 per cent tax on profit above $100,000,000 that corporations report to shareholders. This bill is slightly larger and could raise $700billion over a decade.
This week’s legislation was introduced by Warren and King and Senate Finance Committee Chair Ron Wyden (D-Oregon). Wyden is a key player in the reconciliation bill. He chairs the committee that creates the tax proposals in this bill. The bill is cosponsored by Senators Michael Bennet, Ed Markey (D.Massachusetts), and Sheldon Whitehouse.
The proposal is similar in concept to one that the White House hasIn recent weeks, Democrats scrambled to find tax proposals which could pay for reconciliation bill. Sinema (D-West Virginia) and Sen. Joe Manchin. opposing proposals to hike tax rates on corporations and the wealthy — and with Sinema opposed to the Extremely popular, crucial revenue-raising proposal to lower prescription drug prices — Democrats find themselves having to propose increasingly obscure ways to raise revenue.
Sinema is surprisingly in favorThe corporate minimum income tax. “This proposal represents a commonsense step toward ensuring that highly profitable corporations — which sometimes can avoid the current corporate tax rate — pay a reasonable minimum corporate tax on their profits,” she said in a statement.
Sinema’s statement is ironic considering that her opposition to raising the corporate tax is part of why corporations can avoid paying taxes, since the low rate makes it easier for corporations to push down their effective tax rate. Further, she’s shown little interestHer statement about closing loopholes that allow corporations dodge the statutory rate of tax suggests that she may be lying.
Still, garnering the support of Sinema is huge in today’s politics, since she and Manchin are the Democrats’ biggest roadblocks to passing bills in Congress. They have already succeeded in cutting the reconciliation bill by the duo. Nearly halfDespite objections from progressive legislators.
Although no Democrats have objected to the tax proposal, it’s unclear if Manchin supports it. Outlets reported earlier this week that Manchin was generally supportive of the White House’s proposals for a corporate minimum tax and a billionaire taxBut, it is more recent reporting has foundManchin may not be supporting the billionaire tax. This would only levy tax on the investment incomes the top 0.00021% wealthiest Americans.
