Momentum is building this week in Congress behind President Biden’s Build Back Better Agenda as House and Senate Democrats negotiate how they are going to raise revenue linked to the roughly $2 trillion new spending that the reconciliation bill would introduce.
Yesterday, Oregon Senator Ron Wyden officially unveiled his Billionaires Income Tax plan which, as we highlighted earlier this week, would tax the richest Americans on unrealized capital gains. Unfortunately, this plan is no longer in play as a revenue source thanks to pushback from moderates like West Virginia Senator Joe Manchin.
Now Democrats have introduced a new proposal to raise taxes on millionaires and corporations, which would help to enact programs like universal pre-K, expanded Medicare benefits, and the expanded child tax credit. This week, we’re shining a spotlight on this proposal that, like previous ones, forces the wealthy and corporations in America to start paying their fair share in taxes.
Billionaire tax out, corporate minimum tax in: Where the White House landed on tax plans by Jeff Stein
The new tax proposal in the reconciliation bill involves a lot of different parts, including a brand new millionaire surtax. Here is a breakdown of its most important elements:
- 15% corporate minimum tax
- 1% surcharge on corporate stock buybacks
- Millionaire surtax
- 5% surtax on incomes above $10 million
- An additional 3% surtax on incomes above $25 million (adding up to 8%)
- Closing Medicare tax loophole on wealthy
- Limit Excess Business losses for wealthy
- Invest in IRS tax enforcement
The proposal is promising and, although it doesn’t go as far as we need it to, it’s definitely a step in the right direction towards tax fairness. Only time will tell whether moderate Senators Sinema and Manchin will get on board with it.
Who Could Pay More With a 15% Corporate Minimum Tax? Not Just Amazon by Theo Francis and Kristin Broughton
Amazon was the only company mentioned by name by Senators Elizabeth Warren, Angus King, and Ron Wyden when they introduced the Corporate Profits Minimum Tax on Tuesday. While it might be the most high-profile corporation that would be affected by a 15% corporate minimum tax, it would by no means be the only one. The new corporate tax would apply to about 200 companies that all make over $1 billion in profits each year. For too long, corporations have paid next to nothing in federal taxes as a result of loopholes, exemptions, and deductions. It’s time for Congress to find the political will to pass this measure in order to finally end this egregious practice.
Senate Democrats’ Corporate Minimum Tax Could Address the Worst Corporate Tax Dodging by Steve Wamhoff
Year after year, America’s largest corporations have gotten away with not paying their fair share in taxes. In 2020, as most of America was suffering financially during the height of the COVID-19 pandemic, 55 of America’s most profitable companies – like Nike, Salesforce, and Fedex – did not pay a single dollar in federal taxes. As Wamhoff rightly points out, these companies are not only depriving the American people of much-needed resources, they are also failing to financially give back to the social infrastructure in this country – the schools, roads, bridges, courts, and more – that makes their financial success possible in the first place. The corporate minimum tax in the reconciliation bill is far from perfect – we need to ensure that all companies, not just those making billions, pay their fair share in taxes – but it’s certainly a step in the right direction for economic equity and tax fairness in this country.
Progressives Say Reconciliation Framework Not Enough to Pass Infrastructure Bill by Brett Wilkins
With a reconciliation framework largely agreed upon, moderate Democrats are once again trying to move ahead with a separate vote on the bipartisan infrastructure bill, temporarily sidelining the reconciliation package. Progressive Democrats, however, do not believe that a framework for the Build Back Better agenda is enough and that votes on both packages must be held together, as was originally agreed upon. They’re right to do so. They cannot trust the few non-committal holdouts in the Senate to pass reconciliation if infrastructure is passed first – progressives must stand strong and refuse to pass infrastructure until both pass at the same time.