Amazon, BofA Could Owe More Under a New Corporate Minimum Tax
(Bloomberg) -- More than 70 companies, such as Amazon.com Inc., Bank of America Corp. and DISH Network Corp., likely would owe more in taxes if Congress passes a new corporate minimum levy, according to an analysis released by Senator Elizabeth Warren.
The Massachusetts Democrat, who helped draft the proposal for a minimum tax on corporate profits in President Joe Biden’s economic agenda, released an analysis Thursday that found that at least 70 companies would pay more under the plan, based on their earnings in 2020.
But at least one of those companies has already disputed Warren’s findings. Bank of America said its corporate tax rate for 2020 came to 21%, well over the 15% that would be required under the corporate minimum levy in the plan for companies that earn at least $1 billion in financial, or “book,” profits.
The proposal is meant to target profitable companies that are able to slash their tax bills because they qualify for deductions and credits that whittle down what they owe the Internal Revenue Service. Warren’s analysis concluded that Bank of America would have paid $1.1 billion more had the corporate tax been in effect in 2020.
In a statement, Bank of America said it paid $2.9 billion in corporate income taxes in 2020. Its corporate tax rate, the company said, reflects its environmental, social and corporate governance investments.
“Excluding these legal deductions our income tax rate for 2020 would have been 21%,” the company said.
Amazon would have had to pay an additional $836 million, based on its reported profits and tax payments, had the corporate minimum tax been in effect in 2020, Warren’s analysis concluded. DISH, which received a $223 million tax refund last year, would have ended up owing $386 million to U.S. and foreign governments on its $2.6 billion in global profits, according to the report.
“Billionaire corporations have gotten a free ride in America for too long. It’s time to stop letting giant corporations cheat the system -- they should pay taxes just like everyone else,” Warren said in a statement.
Neither DISH nor Amazon immediately responded to a request for comment on the report.
The corporate minimum tax would raise about $318.9 billion over a decade, accounting for more than 20% of the $1.5 trillion in tax increases in the social-spending and tax bill, which the House could vote on as soon as Thursday. The legislation will then likely undergo revisions in the Senate.
The minimum tax is a roundabout way of raising corporate taxes without touching the 21% corporate tax rate, which Senator Kyrsten Sinema, an Arizona Democrat whose vote is crucial in the evenly divided Senate, has said she opposes raising. The measure has been criticized by some economists, companies, and even House Ways and Means Chairman Richard Neal for adding complexity to the already dense tax code.
Financial companies, banks, telecommunications companies and utilities are likely to bear the brunt of the corporate minimum tax, according to Morgan Stanley research led by Todd Castagno. Collectively, companies in those industries will pay about 60% of the estimated book tax liability, according to Morgan Stanley.
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