Biden hits out at 55 companies that paid nothing in federal income taxes
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President Joe Biden has revived his demand for changes to the nation’s tax code that have allowed corporations to pay little to nothing in federal income tax, comparing what 55 companies have paid in total taxes to the price of a morning cup of coffee.
“Here’s the deal,” the president said on Twitter. “If you spent $3 on your coffee this morning, that’s more than what 55 major corporations paid in taxes in recent years. It’s wrong – and it’s got to change.”
Those 55 companies he mentioned include a group of multinational corporations – including FedEx, Nike and Salesforce – that paid no federal income taxes on their 2020 profits while seeing $40.5bn in US pretax income, according to a recent analysis from the Institute on Taxation and Economic Policy.
A statutory federal tax rate for corporate profits is 21 per cent – those companies would have paid a combined $8.5bn at that rate on their combined revenue, but they received $3.5bn in tax rebates instead, according to the report.
The president’s message arrives in the middle of congressional debate over how to pay for a bulk of his administration’s domestic agenda – including actions to combat the climate crisis and expand the nation’s social safety net – by rolling back Donald Trump-era tax cuts and increasing corporate tax rates, strengthening tax enforcement, and raising taxes on the nation’s wealthiest households.
Democratic lawmakers’ most recent proposal would raise the corporate tax rate to 26.4 per cent from 21 per cent, which was set under the Trump administration. It was previously set at 35 per cent.
Here’s the deal: If you spent $3 on your coffee this morning, that’s more than what 55 major corporations paid in taxes in recent years.
It’s wrong — and it’s got to change.— President Biden (@POTUS) October 20, 2021
But the White House and Senate Democrats are reportedly planning for other options, following Democratic Senator Kyrsten Sinema’s objections to raising taxes on corporations, income or capital gains, potentially sinking chances for major revenue increases to support the president’s agenda, according to reporting from CNN and The Wall Street Journal.
Aides on Wednesday discussed a new minimum tax on corporations, a tax on companies issuing stock “buybacks” to shareholders, and addressing international tax provisions to raise minimum taxes on multinational firms, according to reports citing discussions with officials.
Senators Sinema and Joe Manchin are two critical votes on the package in an evenly divided upper chamber; all 50 Democratic senators need to align behind legislation, with a tie-breaking vote from Vice President Kamala Harris, for its passage on a majority vote against likely Republican opposition.
White House press secretary Jen Psaki told reporters on Wednesday that the president firmly believes the corporate rate must be raised from its current historically low level.
“He thinks that is not only fair but is long overdue,” she said, underscoring that Mr Biden’s position is “clear” on the issue, though the White House has also outlined other parts of the proposal that would address tax fairness in response to questions about potentially abandoning those rate hikes.
“There are a range of components on tax fairness that are in the package, including the global minimum tax, something that we have led the world on,” Ms Psaki said.
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