On Thursday, the Treasury Department announced a proposed rule to create a new corporate tax under the Biden-Harris administration's so-called "Inflation Reduction Act" - which it says "is a key plank of President Biden and Vice President Harris's agenda."
The tax contained in the Inflation Reduction Act (IRA) is designed to raise Treasury revenue by punishing large, profitable corporations who are given federal tax incentives ("preferences") for doing things that are beneficial to the country, such as producing natural gas and other forms of domestic energy.
The new tax "is a key plank of President Biden and Vice President Harris's agenda to make the biggest corporations and wealthiest pay their fair share," the Treasury announcement says.
The Treasury says the new tax is intended to take an additional $250 billion in taxes from large companies that legally and carefully plan their tax strategies:
"[S]ome of the largest and most profitable corporations in the country use tax preferences and aggressive planning strategies to pay little to no taxes."
...
"Their ability to use complex strategies to avoid tax also gives them an unfair competitive advantage."
The rule would eliminate most tax preferences and impose an alternative minimum tax on highly-profitable corporations to ensure they pay what the government considers to be their "fair share," the Treasury announcement explains:
"Treasury's NPRM (Notice of Proposed Rulemaking) would implement the statutory requirement that the biggest corporations pay a minimum 15% tax on profits reported to shareholders, with certain adjustments, to increase tax fairness and generate an estimated $250 billion over the next 10 years (2025-2034), including $20 billion in 2025.
"The CAMT only applies to large corporations that average more than $1 billion in profit per year, not $1 billion in sales. In addition, if these corporations pay regular taxes that equal or exceed 15% of their adjusted profits, they would pay no additional tax."
Comments on the proposed regulations will be accepted until December 12, 2024 and requests made be allowed for those who wish to speak at the public hearing on the proposed regulations scheduled for January 16, 2025.