The Biden-Harris administration on Thursday unveiled proposed new regulations that could raise taxes on about 100 companies, as part of the White House's latest effort to raise government tax revenue, The Washington Post reported.
The new guidelines would set a minimum tax rate of 15% for profitable companies with revenues of more than $1 billion, in an effort to stop companies using accounting tricks to reduce their tax bill, the media reported. ReportedThe policy, called the Corporate Alternative Minimum Tax (CAMT), would tie the tax to “book income” – the income that companies report to investors in their financial statements – rather than taxable income, and is expected to increase taxes by $20 billion in 2025. (Related article: Study finds Harris tax plan could eliminate nearly 1 million full-time jobs)
“We are establishing a degree of tax fairness to ensure that companies that benefit from investments in the economy pay the costs of those investments,” Deputy Treasury Secretary Wally Adeyemo told The Washington Post at a press conference.
What's new: The Biden administration has released proposed new rules that could raise taxes on about 100 large, highly profitable companies that pay little or no taxes to the government, setting off a fierce fight that coincides with a broader overhaul of the 2025 tax code.
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— Tony Romm (@TonyRomm) September 12, 2024
President Joe Biden secured CAMT as part of the Combating Inflation Act of 2022, according to The Washington Post. The policy technically goes into effect in 2023, but the rules have yet to be finalized and federal officials don't expect them to be completed until next year.
The Treasury Department spent two years developing the guidelines, said Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. Bloomberg The rulemaking process is a “huge waste of resources” and its time [been] It would be better to use it for other projects.”
“We’re still in the position of actually trying to understand all of the implications and implementation, and that’s an uncomfortable position to be in. [to be in] “Even years later, it's still the same,” said co-author Davidson Gillette, an accounting professor at East Carolina University. article Speaking to The Washington Post about the impact of the tax:
The revenue provisions of the Inflation Control Act are estimated to increase taxes by about $300 billion between fiscal years 2022 and 2031. According to In a report submitted to the Joint Committee on Taxation (JCT) of the U.S. Congress, Democrats argued that the tax increase would only affect corporations and people earning more than $400,000 a year, but the Joint Committee concluded that it would also result in tax increases for low-income earners, predicting that the average tax rate for people earning less than $10,000 a year would increase from 7.3% in 2022 to 7.6% in 2023, for those earning $30,000 to $40,000 to 7.8% to 7.9%, and for those earning $100,000 to $200,000 to 19.1% to 19.4%.
The White House did not immediately respond to a request for comment.
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