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The Joint Committee on Taxation estimates that the minimum tax would generate $ 318.9 billion over a decade, making it the largest single source of revenue included to help pay for the vast spending program. It would only apply to companies reporting revenues over $ 1 billion in their annual financial reports to shareholders. If these companies owe a tax rate below 15%, the alternative minimum tax would come into effect.
As written, it offers a few exemptions to ease the sting. General business credits, such as those for R&D, housing and renewables, can offset up to about three-quarters of the total tax due, including the additional minimum tax, and businesses would get a credit for the foreign taxes they pay. Net operating losses from the 2020 tax year, when COVID-19 ravaged the economy, can be carried forward to offset taxable income to some extent.
Retirement issues
Still, some business groups say Democrats should grant more exemptions or risk undermining some of their other goals.
The American Benefits Council, a trade group representing some of America’s biggest companies, such as Apple and Exxon Mobil, is calling on Democrats to allow tax exemptions related to defined benefit pension plans.
Lynn Dudley, the group’s senior vice president of global retirement and compensation policy, said in an interview that the tax should allow deductions for contributions to pension plans and exempt all company profits related to the plans. pension that might otherwise be considered taxable income.
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