07/03/2024 | Press release | Distributed by Public on 07/03/2024 11:42
Passed in the Inflation Reduction Act, the Corporate Alternative Minimum Tax will raise $222 billion; President Biden's proposal to strengthen it would raise another $137 billion.
In order to ensure giant corporations begin paying their fair share, Treasury and IRS must act quickly to issue strong implementing regulations.
Washington, D.C. - U.S. Senators Elizabeth Warren (D-Mass.), Angus King (I-Maine), Michael Bennett (D-Colo.), and U.S. Representative Don Beyer (D-Va.) called on Treasury Secretary Janet Yellen (Treasury) to fully implement the 15% Corporate Alternative Minimum Tax (CAMT) signed into law by President Biden in the Inflation Reduction Act two years ago. Despite having previously indicated that rules would be released in early 2024, Treasury has yet to finalize key rules that would address complexities and preemptively stop corporate attempts to avoid paying their fair share.
For decades, corporations have exploited loopholes within the tax code to avoid paying taxes, shortchanging the government billions of dollars and squeezing America's middle class. The 2017 Trump tax cuts slashed the corporate income tax rate from 35 to 21 percent and created new corporate loopholes, resulting in corporations paying a significantly reduced amount of income tax, or paying nothing at all.
The CAMT represents a historic step to address corporate tax evaders, requiring that when companies report over $1 billion in profits to their shareholders, they must pay at least 15 percent of those profits in taxes. This is a signature accomplishment of Congressional Democrats and President Biden, raising $222 billion to fund critical investments in clean energy jobs and technology to combat climate change. President Biden has made strengthening the CAMT a key part of his FY2025 Budget, proposing an increased rate of 21 percent, which would raise an additional $137 billion.
"(T)he Treasury Department has a critical role to play in the implementation of the CAMT and must roll out strong and timely rules to ensure giant corporations begin paying their fair share," wrote the lawmakers.
In order to fully realize the gains from the CAMT, the Treasury Department and Internal Revenue Service must act quickly to finalize key rules. To date, Treasury and the IRS have only issued preliminary guidance on how to calculate a corporation's "adjusted financial statement income" (AFSI), a key factor in determining a company's final tax bill.
"We appreciate your thoughtful work to implement this historic corporate tax legislation. We urge you to quickly finalize strong rules to implement the corporate minimum tax to ensure that the largest corporations begin to pay their fair share." concluded the lawmakers.
Senator Warren has led the fight to close tax loopholes for the wealthy and giant corporations to ensure a more fair tax system:
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