By Theo Francis, and Kristin Broughton
Democratic lawmakers are pushing a proposal that would seek to collect more taxes from dozens of large companies such as Amazon. com Inc. /zigman2/quotes/210331248/composite AMZN -1.53% that record sizable profits but report little or no tax expense.
The push for a new corporate minimum tax comes as Democrats abandon plans to raise the 21% federal corporate rate to help fund spending on social programs and climate-change initiatives. Instead, they hope to raise hundreds of billions of dollars over 10 years by setting a minimum 15% federal tax rate on large companies, based on the profits companies report to investors.
President Biden released a framework on the spending package on Thursday. The contents of any tax bill put forward by congressional Democrats remain fluid, and some proposals have encountered resistance among House Democrats. No Republicans are expected to support the package, meaning Democrats can’t lose a single vote in the 50-50 Senate, and can afford just three defections in the House.
The corporate minimum tax plan revealed this week targets companies that report $1 billion or more in profits under U.S. generally accepted accounting principles, or GAAP. Backers say the minimum tax would apply to about 200 companies, which they didn’t identify.
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