Debate: Should Congress impose a minimum tax of 15% on companies making at least $1 billion in profits?


In late October, Democrats in Congress introduced a proposed minimum corporate income tax as part of the Build Back Better Act. The bill seeks to ensure that corporations making at least $1 billion in profits (as reported to shareholders) pay at least a minimum 15% tax on those profits. If enacted, the tax will apply to tax years beginning after 2022.

The tax would apply to corporate taxpayers (but not S corporations, RICs or REITs) that meet certain minimum annual income requirements over a three-year period. Income of controlled foreign corporations and unconsolidated entities would also be included – and any deductions for US or foreign income tax would be removed in computing income.

We asked two ALM professors and authors Tax facts with opposing political viewpoints to share their opinions on this tax proposal and its likelihood of passage.

Here is a summary of the debate that ensued between the two professors.

Their votes:



Their reasons:

Bloink: The bottom line is that we need to find a way to pay for these social expenditures in order to make even simplified versions of the next bill palatable to moderate Democrats who oppose massive spending increases without funding.

This tax would only apply to companies that report more than $1 billion in profits to their shareholders – and those that meet certain average minimum income thresholds over a three-year period. Requiring that large corporations pay at least a minimum tax of 15% on these profits is only fair.

Byrne: Raising taxes on American businesses will only do more harm than good. Another massive increase in taxes on these companies will make them less globally competitive. This means that these companies are going to take action to evade the US tax system and, frankly, take their jobs with them.


Bloink: In reality, this minimum tax rate would only apply to about 200 of the largest corporations in the United States. This proposal is detailed and contains rules for determining adjusted financial net income – and it also addresses issues specific to multinational corporations.


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