August 15, 2022 3:32pm EDT
Democrats’ book minimum tax to hit real estate, mining companies the hardest
Real estate and mining industries would face heaviest tax burden under new proposal
By Megan Henney FOXBusiness
One of the biggest revenue raisers in Democrats’ latest health care and climate change spending bill is a new minimum tax on companies’ book income – but the levy will hit some industries harder than others.
The Inflation Reduction Act of 2022 – introduced by Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.Va. – would impose a 15% minimum on corporations based on profits they publicly report on their financial statements to shareholders.
The tax would only apply to companies that reported more than $1 billion in income. Democrats said the levy would affect around 200 of the country's largest corporations – with profits exceeding $1 billion – that pay less than the current 21% rate for businesses. Schumer and Manchin estimated the tax would generate about $313 billion in new revenue over the next decade.
But the tax would be disproportionately borne by certain industries, thanks to a number of carve-outs, according to an updated analysis of the proposal conducted by the nonpartisan Tax Foundation, which advocates for lower taxes.
The real estate, rental and leasing industry would face the heaviest burden under the book tax minimum, seeing a net tax hike of 12.7%. That would be followed by mining, which faces a 4.6% tax hike. In dollar terms, the industries that would account for the largest book minimum tax liabilities are manufacturing ($65.9 million) and finance, insurance and management ($39.4 million).
These industries see a sharper impact because they are at the intersection of the different book tax gaps targeted by Congress.
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https://www.foxbusiness.com/economy/democrats-book-minimum-tax-hit-real-estate-mining-companies-hardest
