Corporate Taxes

Sen. Sinema's bill to stop a seemingly arcane business tax increase that was enacted as part of the 2017 Trump tax law would be hugely beneficial to the private equity industry.

The Inflation Reduction Act was a course correction from decades of tax cuts that primarily went to the richest Americans and left the rest of us with budget shortfalls that conservative lawmakers now seek to plug with cuts to Social Security and Medicare. For the first time in generations we are finally asking those who have benefited the most from our economy to contribute back.

Since TCJA expanded tax breaks for “accelerated depreciation” starting in 2018, it has reduced taxes by nearly $67 billion for the 25 profitable corporations that benefited the most. Congress is now looking at extending this policy.

The notion that we are better off allowing our corporations to pretend their profits are earned in the Cayman Islands or Ireland simply defies logic and the facts. There is no scenario in which the U.S. would be better by ditching the international agreement that the government already negotiated. 

The trio of tax bills that cleared the House Ways and Means Committee in June include tax cuts that would mostly benefit the richest one percent of Americans and foreign investors.

Congress absolutely should raise taxes on the rich and on corporations to generate revenue and improve the fairness of our tax code. President Biden has several proposals to do exactly that. But this is an entirely separate question from whether we should raise the debt ceiling to honor the debts the nation has already incurred and avoid an economic apocalypse.

As one of the most prosperous countries in human history, we have enough resources for our collective needs. By better taxing corporations and the wealthiest, we can generate revenue to improve family security, strengthen our communities, and reduce the debt too.

President Biden’s latest budget proposal includes trillions of dollars of new revenue that would be paid by the richest Americans, both directly through increases in personal income, Medicare and estate taxes, and indirectly through increases in corporate income taxes.

The new corporate minimum tax enacted as part of last year’s Inflation Reduction Act will address some of the worst corporate tax dodging, but what else is needed? A group of Democrats have answered this question with the No Tax Breaks for Outsourcing Act.

A higher tax on stock buybacks would reduce the tax disparity between dividends and buybacks, raise more revenue for productive public investments, and recoup some of Trump's corporate tax cuts that went to wealthy shareholders.

A higher excise tax rate on buybacks is completely reasonable. Quadrupling the rate, as the President proposes, would raise more revenue and cut into the tax advantage buybacks have over dividends. When a company uses their cash holdings to repurchase their own stock, it is an admission that they have few productive investment opportunities. The public does have productive uses for the tax revenue like infrastructure and schools that create value for the entire economy.

After decades of Presidents who ran away from taxes, it’s a sea change to have a chief executive who understands that the rich should pay their fair share, extremely profitable corporations should pay their fair share, and the public sector should have revenue to invest in problems – like climate change and healthcare – that will only be solved with pathbreaking public action.

A new report from the Government Accountability Office finds the average effective federal income tax rate paid by large, profitable corporations fell to 9 percent in the first year the Trump tax law was in effect, and the share of such companies paying nothing at all rose to 34 percent that year.

The European Union has reached unanimous agreement to implement a global minimum tax beginning in 2024. With the EU and UK fully on board, it's time for Congress to follow suit and implement the plan negotiated by the Biden administration. Doing so would improve the corporate tax system here and around the world while making the United States economy stronger and more competitive.

Congressional leaders announced their long-awaited omnibus spending package which will fund the government through September 2023. The good news: the bill does not include needless corporate tax giveaways. The bad news: it also leaves out any expansion of the child tax credit.

Any tax legislation enacted before this Congress ends should prioritize policies that have a proven track record of helping workers and children rather than policies that cut taxes for corporations or for individuals who are already well-off. It's not clear right now whether lawmakers will do that - or whether they will enact any tax legislation at all before the year ends, but here we take a look at the key tax issues that lawmakers are discussing.

If Congress creates a tax break to encourage businesses to conduct research that benefits society, should Netflix be eligible for it? There is no shame in binge-watching Stranger Things or Bridgerton or The Crown, but how many of us really think Netflix deserves a tax break for whatever “research” the company did to provide this […]

Private equity is doing fine on its own and does not need another tax break. Congress should keep the stricter limit on deductions for interest payments —one of the few provisions in the 2017 tax law that asked large businesses to pay a little bit more.

Nearly two dozen of America’s largest corporations together received roughly $50 billion in tax breaks from 2018 through 2021 under a Trump tax law provision that many lawmakers now want to extend. Corporate lobbyists are even asking Congress to extend this “accelerated depreciation” tax break as part of a possible year-end tax bill.

While the Inflation Reduction Act's corporate minimum tax is a huge improvement in our tax system, implementing the global corporate minimum tax would improve it much more. And if other governments implement the global minimum tax, the United States will have an even stronger interest in joining them to ensure that new revenue collected from American corporations flows to the U.S. rather than to other countries.

The Inflation Reduction Act approved by the Senate on Aug. 7 would raise more than $700 billion in new revenue over a decade by closing corporate tax loopholes, empowering the IRS to enforce the tax laws on the books, taxing stock buybacks, and extending a limitation on deductions for business losses. The IRA – if […]

Senate Democrats have announced an agreement on the Inflation Reduction Act that, among other changes to a previous version of the bill, would apply a 1 percent tax on corporations repurchasing their own stock. This proposal was included in the House-passed Build Back Better Act last year and was estimated at that time to raise $124 billion over 10 years. This measure would ensure that income transferred from corporations to wealthy shareholders does not continue to escape taxation.

Apple, one of the largest corporations in the United States despite manufacturing most of its physical products offshore, would likely pay the corporate minimum tax that is included in the Inflation Reduction Act that the Senate is debating this week. 3M, a manufacturer that has about 40 percent of its workforce in the United States, likely would not pay the corporate minimum tax if current trends in the company’s profits and taxes continue, because it is already paying above 15 percent of its profits in taxes.

The biggest revenue-raising provision in the Inflation Reduction Act, the 15 percent minimum tax for corporations that have more than a billion dollars in profits, is under attack from members of Congress who argue that manufacturing companies should not be required to pay any minimum amount of tax. Sen. Mike Crapo, the top Republican on […]

The vast majority of Senate Democrats joined their Republican colleagues in approving a new corporate tax break related to research in legislation that contains no offsetting corporate tax increases.