Following is a statement by Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, regarding news that the White House may propose a corporate minimum tax to prevent profitable firms from paying $0 in federal income tax.
“A White House proposal to follow Trump’s massive corporate tax cuts with a minimum corporate tax would be like shooting a person on Fifth Avenue and then offering them a band-aid. The Trump tax law slashed the corporate tax rate and provided additional breaks for investments that companies would have made anyway. It replaced loopholes that incentivized offshore profit shifting with new rules that continue that trend while also rewarding companies that send real assets and operations offshore. Trump’s corporate tax law is a mess, and this latest idea from White House advisers, on its own, will not fix it.
“The concept of a corporate minimum tax has been discussed by lawmakers and presidential candidates, but never in isolation from other changes in the tax code. A corporate minimum tax would only make sense as part of a broader plan to address problems created by the 2017 law and the problems that predated it.”
Read ITEP’s report, Corporate Tax Avoidance in the First Year of the Trump Tax Law, to learn more about 91 profitable companies that paid $0 in federal income taxes in 2018.