(FiveNation.com)- Massachusetts Democratic Senator Elizabeth Warren has proposed a new corporate tax that would help fund President Joe Biden’s Build Back Better bill.
The proposal Warren has made would include a minimum tax of 15% for any corporation that earned profits of at least $1 billion. According to her office, many large companies have worked and “rigged” the country’s tax code, employing whole armies of skilled accountants to find out ways to avoid paying their fair share of federal taxes.
As Warren’s office noted:
“In 2020, DISH Network — one of the most profitable companies in the United States — reported $2.6 billion in global profits and paid their founder and chairman almost $95 million. But the company paid no federal income tax and even received a $231 million tax refund from the U.S. government.
“That same year, the massive defense conglomerate Northrop Grumman made $3.7 billion. Its effective tax rate? 6.7% — less than one-third of the statutory corporate tax rate of 21%.”
Warren’s office says her new proposed Corporate Profits Minimum Tax would generate revenue of $319 billion for the federal government over the next 10 years. That would go to “invest in the American economy and support America’s workers and families.”
As her office said:
“Requiring these companies to pay their fair share in taxes will help fund transformative investments in our country: universal pre-K, child-care, paid leave, tax credits for families, expanded Medicare coverage and more.”
There are 70 companies that have been identified that would be subject to this new CPMT. Among them are Salesforce, PayPal, Facebook, Microsoft, Google, Bank of America, Nvidia, Apple and Amazon.
Some prominent executives have countered that the federal government was incapable of being able to use resources effectively to achieve productive goals. Speaking at the CEO Council Summit held by The Wall Street Journal recently, Elon Musk, the CEO of both SpaceX and Tesla, said:
“It does not make sense to take the job of capital allocation away from people who have demonstrated great skill in capital allocation, and give it to an entity that has demonstrated very poor skill in capital allocation, which is the government. Government is simply the biggest corporation, with the monopoly on violence.”
Musk said early in that summit that he believes it would be better if the Senate doesn’t pass the Build Back Better Act, which totals $1.75 trillion in spending.
There are many very progressive aspects to the social spending bill. One is an investment of $80 billion to the Internal Revenue Service so the agency can hire up to 87,000 more agents. This hiring blitz would be done so that the IRS could conduct up to 1.2 million additional tax audits every year.
Republican members of the House Ways & Means Committee have said that if this happens, Americans would be twice as likely to have to face an IRS audit than they have to this point.
What’s more, almost half of those audits would be conducted on people who make $75,000 per year or less.