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Associated PressDec 24, 2023
US Treasury Prepares New Rules to Enforce 15% Corporate Tax
Above: US Secretary of the Treasury Janet Yellen testifies during a hearing before the House Committee on Financial Services at Rayburn House Office Building on July 9, 2024 on Capitol Hill in Washington, DC. Image copyright: Alex Wong/Staff/Getty Images News via Getty Images
The Facts
The US Dept. of the Treasury released a new 603-page proposal on how it will enforce the 15% corporate alternative minimum tax (CAMT), which was passed by Congress as part of the 2022 Inflation Reduction Act.
According to the Treasury Dept., the new rules will force roughly 100 companies—who it claims currently pay an average of 2.6%—to start paying the 15% minimum. It predicts this will garner $20B in tax revenue in 2025 and $250B over the next decade.
The Spin
Narrative A
This rulebook is common sense, as the largest corporations in America not only play an average of 2.6%, but more than half of them pay less than 1%. The CAMT was passed with the goal of making the absolute richest companies pay their fair share — which is why it only applies to those with $1B in profits, not sales. While companies will have a chance to comment on the matter, this proposal should be accepted by anyone who prioritizes Main Street over Wall Street.
Narrative B
America has been debating the same tax issues for decades, and as is always the case, higher taxes won't make a dent in the federal deficit. The US has higher income, capital gains, real estate, and inheritance taxes than the average OECD country, but the government spends too much on subsidized social programs to stay afloat. Even if a 100% income tax on billionaires was imposed and the corporate tax rate was increased, the debt would barely come down and the economy would crumble.