Democratic presidential front-runner Joe Biden on Wednesday rolled out a tax plan that includes a provision aimed at Amazon and other companies that recently have paid $0 in federal income taxes.
The plan — which would deliver $3.2 trillion over 10 years to fund his proposals addressing climate change, infrastructure needs, health care and higher education — features a “minimum book tax” for Corporate America that’s expected to raise $400 billion over a decade.
This tax would amount to a 15% levy on book income, according to Biden’s plan, which was obtained by MarketWatch. It initially would apply to companies with annual net income of more than $100 million, and last year about 1,200 companies were in that camp. It would give credit for foreign taxes paid and make allowances for carryforwards.
The White House hopeful’s tax plan also calls for raising the corporate tax rate to 28% from 21% and lifting the top tax rate on individuals to 39.6% from 37%, with those moves raising $730 billion and $310 billion, respectively. Other provisions include taxing capital gains and dividends as ordinary income for taxpayers with more than $1 million in income to bring in $800 billion over a decade.
Biden’s minimum-tax proposal comes six months after he engaged in a back-and-forth on Twitter with Amazon AMZN, -0.41% about the tech giant’s tax payments, with the veteran politician tweeting that “no company pulling in billions of dollars of profits should pay a lower tax rate than firefighters and teachers.”
Biden’s policy director, Stef Feldman, said on Wednesday that the former veep is “committed to being transparent with the American people about the smart and effective ways he’d pay for the bold changes he’s proposing.”
“He believes that being forthright with voters about how plans would be financed is critical to building the public support necessary to beat Donald Trump, help more Democrats win up and down the ballot, and then pass legislation through Congress,” Feldman said in a statement.
A resident fellow at the conservative American Enterprise Institute, Kyle Pomerleau, noted that Democratic presidential hopeful Elizabeth Warren also has a tax plan that would target companies’ book income.
“Her tax would be more expansive as it would have no adjustment for losses or foreign taxes paid. It would also not be a minimum tax — companies would need to pay it on top of their regular corporate tax liability,” Pomerleau wrote in a blog post.