Associated
Press April 11, 2019
WASHINGTON (AP) —
Democratic presidential candidate Elizabeth Warren is proposing a new tax on
corporate profits that's designed to prevent business giants from taking
advantage of the existing tax code to effectively pay a zero rate.
The 7% tax on
corporate profits above $100 million is the latest in a series of ambitious
policy proposals from the Massachusetts senator. It's in line with her broader
push to rein in such industries as the financial sector and technology firms.
Her campaign
estimates the proposal would hit roughly 1,200 firms. Those corporations would
pay the tax on top of any liability under current tax rules, which, as Warren
said in a Thursday blog post on her plan, is necessary because "our
corporate tax code is so littered with loopholes that simply raising the
regular corporate tax rate alone is not enough."
Dubbing her pitch
"the Real Corporate Profits Tax," Warren wrote: "It will make
our biggest and most profitable corporations pay more and ensure that none of
them can ever make billions and pay zero taxes again."
The proposal would
raise about $1 trillion of new revenue over 10 years, according to economists
advising Warren's campaign. She didn't specify what that money would pay for.
The new tax would be imposed on corporations' total profits in the U.S. and
overseas.
The so-called
wealth tax Warren proposed in January on about 75,000 of the nation's
highest-earning households would raise an estimated $2.75 trillion over 10
years, money that she later said would go partly toward creating a
government-supported universal child care program.
Warren also is
billing the new corporate tax as a way to boost smaller businesses and aid
competition with behemoths that may currently pay lower effective tax rates,
particularly following the 2017 Republican tax overhaul, which lowered the
corporate rate from 35% to 21%. She specifically cited Amazon on Thursday as an
example of a major corporation that has reported paying zero corporate income
tax. The company pushed back on that in a statement.
"Amazon pays
all the taxes we are required to pay in the U.S. and every country where we
operate," the company said: "Corporate tax is based on profits, not
revenues, and our profits remain modest given retail is a highly competitive,
low-margin business and our continued heavy investment."
Other Democratic
presidential candidates have offered proposals designed to address individual
income inequality, such as California Sen. Kamala Harris' plan for a lower- and
middle-income tax credit and New Jersey Sen. Cory Booker's plan to endow
savings accounts for all children. Warren's latest idea, however, is unique as
a foray into new corporate taxation policy.
Meanwhile, Warren
reported on Wednesday that her campaign raised $6 million in the first quarter
of the year, surpassing expectations but still lagging far behind the money
raised by Harris and Vermont Sen. Bernie Sanders.
Warren, a former
Harvard University law professor, made a name for herself a decade ago with
calls for greater consumer protections, which led to the creation of the
Consumer Financial Protection Bureau under then-President Barack Obama.
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