WASHINGTON—President Biden’s proposed 15% minimum tax on profitable corporations would have an effect on far fewer firms than the version he campaigned on, based on particulars the Treasury Department launched Wednesday.
The tax—aimed at firms that report giant income to buyers however low tax funds—would apply solely to firms with earnings exceeding $2 billion, up from the $100 million threshold used throughout the marketing campaign. The Biden plan would now additionally let firms topic to the tax get the profit for tax credit for analysis, renewable power and low-income housing—in a recognition that the campaign-trail model may have undercut the president’s choice to encourage firms to spend money on these areas.
The result’s that simply 180 firms would even meet the earnings threshold and simply 45 would pay the tax, based on administration estimates that assume the rest of the administration’s plan gets implemented. Nearly 1,100 U.S.-listed firms would meet the $100 million threshold, based on S&P Global Market Intelligence. Many of them would nonetheless face sharply larger tax payments from the remainder of the Biden agenda, which raises charges on home and overseas earnings.
The 15% minimal tax “is a targeted approach to ensure that the most aggressive tax avoiders are forced to bear meaningful tax liabilities,” the Treasury Department said in a new report.
The Treasury report outlines the arguments for the Democratic administration’s broader company tax agenda, which might increase greater than $2 trillion over 15 years to pay for eight years of spending on roads, bridges, transit, broadband and different infrastructure tasks.
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