On Tuesday evening, Senate Finance Committee Chairman Ron Wyden (D-OR) and Senses Angus King (I-ME) and Elizabeth Warren (D-MA) released a bill to impose a minimum tax to some large companies. The proposal is co-sponsored by Les Sens. Michael Bennett (D-CO), Edward Markey (D-MA) and Sheldon Whitehouse (D-RI).
The minimum corporate income tax would require that companies that, for any applicable three-year taxable period, report more than $ 1 billion in income in their financial statements, also known as “accounting income”, pay at least one billion dollars. 15% tax rate on these profits. A lower threshold of $ 100 million would apply to foreign parent companies. The adjustments are intended for various business credits, loss carryforwards and credit for minimum tax payments from the previous year versus regular tax in future years. The project would be in effect for tax years beginning after December 31, 2022.
Since other sources of revenue for the Build Back Better budget reconciliation bill, such as corporate and personal rate hikes, risk being left out of the package, Democrats are exploring alternatives to generate enough cash. income to offset the expenses of the package.
The fact sheet accompanying the proposed minimum corporate income tax predicts that it will affect around 200 businesses and generate “hundreds of billions in revenue over ten years.” An official score from the Joint Committee on Taxation has not been released.