A 15% minimum tax on large, profitable corporations that is part of President Biden’s infrastructure proposal would affect far fewer companies than the version he campaigned on, according to details the Treasury Department released Wednesday.
The tax — aimed at companies that report large profits to investors but low tax payments — would apply only to companies with income exceeding $2 billion, up from the $100 million threshold that Mr. Biden pushed during the campaign.
The Biden plan would now also let companies subject to the tax get the benefit of tax credits for research, renewable energy and low-income housing, a recognition that the campaign-trail version could have undercut the president’s preference to encourage companies to invest in those areas.
The result is that just 180 companies would meet the income threshold and just 45 would pay the tax, according to administration estimates that assume the rest of the administration’s plan gets implemented. Nearly 1,100 U.S.-listed companies would meet the $100 million threshold, according to S&P Global Market Intelligence. Many of them would still face sharply higher tax bills from the rest of the Biden proposals, which raise rates on domestic and foreign income.
Author(s): Richard Rubin, Kate Davidson
Publication Date: 7 April 2021
Publication Site: Wall Street Journal