The proposal, called “The Corporate Profits Minimum Tax” is sponsored by senators Elizabeth Warren (D-Mass.), Angus King (I-Maine), and Senate Finance Committee Chair Ron Wyden (D-Ore.) and co-sponsored by senators Michael Bennet (D-Colo.), Edward J. Markey (D-Mass.), and Sheldon Whitehouse (D-R.I.).
It aims to prevent the largest and most profitable company’s across America from avoiding having to pay taxes and lawmakers hope it will create a more even playing field and fair tax system.
Senators want the proposal to be included as a source of revenue to help fund President Joe Biden’s Build Back Better agenda, which is currently being negotiated in Congress.
Specifically, The Corporate Profits Minimum Tax bill would ensure that companies making more than $1 billion in profits annually pay a 15 percent minimum tax rate on those profits. The new legislation would apply to around 200 companies with more than $1 billion in profits, senators said.
Lawmakers believe the new legislation would generate “hundreds of billions in revenue” over the next ten years which can be reinvested into the U.S. economy and give it a much-needed competitive boost.
Senators noted that the current tax system utilized in the United States enables large and highly profitable corporations to pay little to no tax thanks to a number of loopholes and exemptions, leaving ordinary citizens to pick up the slack.
They specifically referenced Amazon, which they said reported $45 billion in profits over the past three years, including a massive $20 billion in 2020, even as families across the globe struggle amid the COVID-19 pandemic.
Yet the tech giant paid an effective tax rate of just 4.3 percent—well below the 21 percent corporate tax rate, senators said, noting that in 2018, the company paid no federal income tax at all.
“Amazon isn’t alone: between 2008 and 2015, 40% of our biggest companies paid zero or less in federal taxes in at least one year, even while they were telling their shareholders they were wildly profitable,” the senators wrote.
“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 Senator Warren in a statement.
“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. I’m glad to have worked alongside Senator King and Chair Wyden, with the support of President Biden, to announce this proposal so that we can raise essential revenue needed to invest in families and our economy.”
It is not yet clear how a 15 percent minimum tax would impact major companies or how the final proposed legislation will work.
Moderate Democratic Senator Krysten Sinema (D-Ariz.), who has for weeks told colleagues that she will not support an increase in the corporate or income tax rate, threw her support behind the proposed legislation after it was unveiled.
On Twitter, Sinema said it represented a “common sense step towards ensuring that highly profitable companies pay a reasonable minimum corporate tax on their profits.”
The proposal comes as Democrats continue to hash out the framework for their massive social spending and climate bill this week.
From The Epoch Times