Massachusetts Senator Elizabeth Warren and her allies will propose a minimum tax on the profits of the nation’s richest corporations, regardless of what they say they owe the government, as part of the Democrats’ $ 3.5 trillion economic and social package.
Ms. Warren’s so-called “real corporate income tax” was an important part of her presidential campaign, and she has enlisted Senator Angus King, of Independent Maine, to enforce her call for taxation on profitable corporations despite the loopholes and maneuvers that have allowed many of them to avoid state corporate tax altogether.
The move would require the most profitable companies to pay a 7 percent tax on the profits they report to investors – known as the annual book value – over $ 100 million. By taxing the profits reported to investors, not the Internal Revenue Service, the Democrats would be making profits that companies would like to maximize, not the profits they are trying to reduce for tax purposes.
“During the presidential campaign, Joe Biden and I were at odds on some tax policies, but we strongly agreed on one thing: Corporations shouldn’t be able to tell shareholders they are making huge profits and then tell the IRS that they have not made a profit . ”“ Ms. Warren said in an interview.
Following the passing of a $ 1 trillion bipartisan infrastructure bill expected this week, Democrats will turn to a draft budget that sets out the terms of a sprawling multi-trillion dollar package that will support the rest of their ambitions of strengthening and paying for the nation’s social safety net by increasing taxes on wealthy individuals and businesses. If it releases the Senate, it is all but guaranteed as only the 50 Senators who partner with the Democrats will get votes.
That package won’t fully materialize until the fall, but the unveiling of the bare blueprint has spurred Democrats like Ms. Warren to offer their proposed contributions. While suggestions on topics like free pre-K, community college, and family vacations have attracted a lot of attention, how it is paid, including the proposed tax hikes for the rich and corporate, will generate at least as much controversy. The campaign to further screen wealthy businesses was backed by reports from ProPublica showing that the richest Americans pay very little in taxes.
“Now is the time to put the revenue on the table to pay for our infrastructure plans – this is the time,” said Ms. Warren.
In a separate interview, Mr. King responded to the expected Republican criticism by saying, “This is not socialism – it is an attempt to have a fair tax at a fairly low level on companies that would otherwise pay zero.”
An economic analysis by Gabriel Zucman and Emmanuel Saez, economics professors at the University of California, Berkeley, who advised Ms. Warren during the presidential campaign, estimated that around 1,300 public corporations would be affected by politics, generating nearly $ 700 billion by 2023 would and 2032.
“We understand that good legislation involves showing how it’s paid and These payments come from the billionaires and giant corporations who have avoided paying their fair share for so long, ”Ms. Warren said. “In order to get the tax revenue part of the reconciliation package right, the point is to make the competitive conditions a little more even for everyone.”