Democratic presidential candidate Elizabeth Warren wants to raise $1 trillion in revenue with a new 7% tax on corporate profits over $100 million

Democratic presidential candidate Elizabeth Warren wants to raise $1 trillion in revenue with a new 7% tax on corporate profits over $100 million

  • Elizabeth Warren, the economic policy pacesetter in the Democratic presidential primary field, wants to raise $1 trillion in government revenue from a new 7% surtax on profits of the largest corporations.
  • What the Massachusetts senator dubs the “Real Corporate Profits Tax” would apply to worldwide profits exceeding $100 million.
  • “To raise the revenue we need – and ensure every corporation pays their fair share – we need a new kind of tax that big companies can’t get around.”
  • The Trump tax cut, following entreaties from corporations for a more globally competitive U.S. system, reduced the top corporate rate to 21% from 35%. But deductions remaining in the IRS code allow some large corporations to reduce their effective rates far below that – in some cases all the way to zero.
  • Warren cited two high-profile examples: Amazon has reported $10 billion in 2018 profits but zero in U.S. corporate taxes; Occidental Petroleum has reported $4.1 billion in profits and also paid zero.
  • Her new surtax would prevent them, and other corporations with profits exceeding $100 million, from wiping out their tax liabilities.
  • Because stock values and executive compensation turn on those public reports, Warren reasons, corporations don’t obscure their real profits to shareholders with the write-offs they use for the IRS. Those include large deductions for depreciation, the value of stock options and overseas tax shelters.