Democratic lawmakers have revealed new details regarding a proposal to implement a 15% minimum corporate tax on the declared income of many massive corporations.
On Tuesday, three senators announced the proposal, including Elizabeth Warren, Angus King, and Senate Finance Committee Chair Ron Wyden. The officials who proposed the corporate tax said it would be included as a source of revenue to fund United States President Joe Biden's "Build Back Better" bill.
Minimum Corporate Tax
Arizona Democratic Sen. Kyrsten Sinema expressed her support of the corporate minimum tax shortly after it was released. She is considered a key senator in the negotiations as she is also under fire for her continued opposition to Biden's spending bill.
The release given by senators revealed that the corporate minimum tax proposal would apply only to companies that publicly report over $1 billion in profits per year for three years. It would also create a 15% minimum tax on those profits across the board.
The proposed corporate minimum tax will preserve the "value of business credits'' which include R&D, clean energy, and housing tax credits. Additionally, the proposal would give companies some flexibility when it comes to carrying forward losses, utilizing foreign tax credits, and claiming a minimum tax credit against regular tax in future years, CNBC reported.
The situation comes as Democrats are struggling with negotiations on a new proposal that would tax wealthy Americans. Lawmakers are facing resistance to their proposal to double down on tax cheats by requesting bank information of accounts, which has been called out as "screwed up."
Democrats face mounting pressure as more and more lawmakers express their doubts about the feasibility of the billionaires' tax. Many officials are looking for ways to raise funds to financially support Biden's bill before the president's trip to Europe later this week.
The planned events include the Group of 20 leaders summit that is scheduled to be held in Rome and a climate change conference. Moderate Democrats are the key opposition to the tax rate increases and have forced other lawmakers to propose different ways to raise money for the $2 trillion bill, the New York Times reported.
Biden's Massive Bill
The situation also comes as Sinema has expressed her support for the corporate minimum tax, a sharp contrast to her continued opposition to Biden's other agendas. In a statement released on Tuesday, the lawmaker said the proposal represented a commonsense step towards having highly profitable companies pay a reasonable amount of tax based on their profits, similarly to other residents.
Sinema added that she was looking forward to negotiating with the White House and her colleagues regarding the expansion of economic opportunities. Under the legislation, roughly 200 billion-dollar firms will be subject to the tax requirements.
Previously, Sinema had opposed a Democrat-backed bill that aimed to offset Biden's spending package costs that would have taxed corporations and high-income individuals. The funds generated by the proposal would have been used for universal pre-K, paid family and medical leave, tuition-free community college, and funds for climate change efforts, The Hill reported.
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