Elizabeth Warren to propose minimum tax on ‘real corporate profits’

Massachusetts senator to offer proposal as part of Democrat budget package expected in autumn

Elizabeth Warren is expected to propose a minimum tax on the profits of the richest companies in the US, no matter what they claim to owe the federal government.

The proposal will come as part of the Democrats’ $3.5 trillion economic and social policy package, expected to take shape over the next two months.

Senator Warren has enlisted Senator Angus King of Maine, an independent, to help move the idea forward, The New York Times reports.

The Massachusetts Democrat’s “real corporate profits tax” was a central part of her 2020 presidential campaign and is designed to stop company’s using loopholes and other ways of minimising tax owed to the federal government – many pay no federal income tax at all.

An outline of the proposal is that the most profitable companies would pay a seven per cent tax on earnings that they report to investors above $100m.

Companies like to maximise these figures and minimise what they report to the Internal Revenue Service.

Ms Warren believes that corporations should not be able to report one figure to their shareholders and another to the IRS.

While the senator and Joe Biden disagree on some tax policies, Ms Warren says that she and the president are in agreement on this issue, the Times reports.

On Monday, Senate Democrats released a budget resolution that maps out $3.5 trillion in spending boosts and tax breaks aimed at strengthening social and environmental programs, setting up an autumn battle over the Biden administration’s domestic policy ambitions.

The measure lays the groundwork for legislation later this year that over a decade would pour mountains of federal resources into their top priorities.

Included would be more money for health care, education, family services, and environmental programs, as well as tax breaks for families.

Much of what is proposed will be paid for with tax increases on the rich and corporations, potentially including Ms Warren’s proposal.

Senator King said in an interview that usual Republican criticism of such proposals – calling them “socialism” – is incorrect.

“It’s not socialism – it’s an attempt to have a fair tax at a pretty low level for companies that would otherwise pay zero.”

Senator Warren is passionate about both corporations and individuals paying their fair share of tax

She recently took aim at Amazon founder Jeff Bezos, saying that if the richest man in the world could afford to go to space, he could afford to “pitch in” and pay more in taxes.

“The richest guy on Earth can launch himself into space while over half the country lives paycheque to paycheque, nearly 43 million are saddled with student debt, and child care costs force millions out of work,” Ms Warren said in a tweet.

“He can afford to pitch in so everyone else gets a chance,” she added.

She later tweeted from her official Senate account: “Billionaires who can afford to take a 10-minute joyride to outer space can afford to pay a wealth tax here on Earth.”