Senate Democrats unveiled more details Tuesday about their proposal to implement a 15% minimum tax on corporate profits as part of their efforts to cover the cost of President Biden’s expansive social spending bill.
Introduced by Sens. Elizabeth Warren, D-Mass., Angus King, I-Maine, and Ron Wyden, D-Ore., the measure would apply to roughly 200 companies that report more than $1 billion in annual profits, according to a fact sheet released by the lawmakers. The Democrats said the proposal would generate hundreds of billions in tax revenue over a 10-year period.
Sens. Michael Bennet, D-Colo., Edward Markey, D-Mass. and Sheldon Whitehouse, D-RI, co-sponsored the proposal. Democratic leaders have pursued alternate ways of generating tax revenue after moderates such as Sen. Kyrsten Sinema indicated they opposed changes to the corporate tax rate.
Sinema said she supports the proposed minimum tax on corporate profits – a positive step for Democratic leaders scrambling to reach a consensus and pass Biden's signature legislation.
"This proposal represents a commonsense step toward ensuring that highly profitable corporations — which sometimes can avoid the current corporate tax rate — pay a reasonable minimum corporate tax on their profits, just as everyday Arizonans and Arizona small businesses do," Sinema said. "I look forward to continuing discussions with the White House and colleagues to expand economic opportunities, retain America’s economic competitiveness, and help Arizona families get ahead."
The proposal would maintain some business tax credits, such as incentives for clean energy and housing. Warren said all 50 Senate Democrats would support the proposal, meaning that moderate Sen. Joe Manchin is in favor. Additionally, Wyden said Treasury Secretary Janet Yellen confirmed the proposal aligns with the global minimum tax on corporations.
The lawmakers said that current tax code allowed many large companies to pay "little or no tax" on their reported profits. They noted Amazon earned $45 billion in profits over the last three years but paid an effective tax rate of "just 4.3% – well below the 21% corporate tax rate."
The proposal did not include additional details on a purported "billionaire tax," a separate measure that would place an annual tax on billionaires’ unrealized investment gains.
Wyden told reporters that more details on a billionaire proposal would be released later in the day.
This story has been updated.