Treasury proposes rule to prevent large corporations from evading income taxes

2024-12-24 08:40:57 source: category:Markets

WASHINGTON (AP) — The Biden administration on Thursday proposed a new rule that would require the largest U.S. companies to pay at least 15% of their profits in taxes.

Treasury Department officials estimate that about 100 of the biggest corporations — those with at least $1 billion in annual profits — would be forced to pay more in taxes under a provision that was included in the administration’s 2022 Inflation Reduction Act. Democratic members of Congress, including Elizabeth Warren, a senator from Massachusetts, have urged the White House to implement the tax.

Similar to the alternative minimum tax that applies to mostly wealthier individuals, the corporate AMT seeks to ensure that large corporations can’t use tax loopholes and exceptions avoid paying little or no taxes on extensive profits.

The tax is a key plank administration’s’ “agenda to make the biggest corporations and wealthiest pay their fair share,” the Treasury Department said.

Treasury officials said Thursday that the AMT would raise $250 billion in tax revenue over the next decade. Without it, Treasury estimates that the largest 100 companies would pay just 2.6% of their profits in taxes, including 25 that would pay no taxes at all.

RELATED COVERAGE Treasury recovers $1.3 billion in unpaid taxes from high-wealth tax dodgers Women lawmakers take the lead in shaping policy in Nebraska. Advocates hope other states follow. Mississippi House panel starts study that could lead to tax cuts

Former President Donald Trump has promised to get rid of the corporate AMT if he is elected. As president, Trump signed legislation in 2017 that cut the corporate tax rate to 21% from 35%. He now says he supports reducing the corporate rate further, to 15%.

In a letter this summer to Treasury Secretary Janet Yellen, Warren and three congressional colleagues cited research that found that in the five years following Trump’s corporate tax cut, 55 large corporations reported $670 billion in profits, but paid less than 5% in taxes.

Treasury’s proposed rule will be open for comment until Dec. 12, the department said, and there will be a proposed hearing on the rule Jan. 16.

More:Markets

Recommend

Powerball winning numbers for November 11 drawing: Jackpot hits $103 million

The Powerball jackpot hit nine figures Monday after no one pulled the lucky six numbers Saturday nig

Jamie Foxx makes first public appearance since hospitalization, celebrates ability to walk

Jamie Foxx has come a long way since experiencing a "medical complication" in April.The Oscar-winnin

MLB Winter Meetings: Live free agency updates, trade rumors, Shohei Ohtani news

Day 2 of Major League Baseball's annual winter meetings is underway in Nashville, where the rumors o