Three Democratic senators on Tuesday unveiled a bill that would require around 200 U.S. companies to pay a minimum tax rate of 15%
The proposal, titled “The Corporate Profits Minimum Tax” is sponsored by Senators Elizabeth Warren (D-Mass.), Angus King (I-Maine) and Senate Finance Committee Chairman Ron Wyden (D-Ore.) And co-sponsored by Senators Michael Bennet (D-Colo.), Edward J. Markey (D-Mass.) and Sheldon Whitehouse (DR.I.).
It aims to prevent America’s largest and most profitable companies from avoiding paying taxes, and lawmakers hope this will create a level playing field and a fairer tax system.
Senators want the proposal included as a revenue stream to help fund President Joe Biden’s Build Back Better program, which is currently being negotiated in Congress.
Specifically, the corporate minimum tax bill would ensure that companies making more than $ 1 billion in profits per year pay a minimum tax rate of 15% on those profits. The new legislation would apply to about 200 companies making 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 could be reinvested in the US economy and give it a much needed competitive boost.
Senators noted that the current tax system used in the United States allows large, highly profitable businesses to pay little or no tax through a number of loopholes and exemptions, leaving ordinary citizens to take over.
They specifically referred to Amazon, which they say has brought in $ 45 billion in profits over the past three years, including $ 20 billion in 2020, even as families around the world struggle amid the pandemic. of COVID-19.
Still, the tech giant paid an effective tax rate of just 4.3%, well below the corporate tax rate of 21%, Senators said, noting that in 2018 the company had not paid any federal income tax.
“Amazon is not alone: between 2008 and 2015, 40% of our largest companies paid zero or less federal taxes in at least a year, even as they told their shareholders they were extremely profitable, ”wrote the senators.
“Giant corporations have been exploiting tax loopholes for too long, and it is time they paid their fair share to help run this country, like everyone else,” Senator Warren said in a statement.
“The minimum corporate income tax would end the corporate double-dealing and ensure that companies pay something in taxes when they report billions in profits to their shareholders. I am happy to have worked alongside Senator King and President Wyden, with the support of President Biden, to announce this proposal so that we can raise the essential income needed to invest in families and our economy. “
It is not yet clear how a 15 percent minimum tax would impact large corporations or how the final proposed legislation will work.
Moderate Democratic Senator Krysten Sinema (D-Arizona), who has told colleagues for weeks that she will not support an increase in the corporate or income tax rate, supported the bill after its unveiling.
At TwitterSinema said it was a “common sense step to ensure that highly profitable companies pay a reasonable minimum tax on their profits.”
The proposal comes as Democrats continue to set the framework for their massive social spending and climate bill this week.