Democratic presidential hopeful Sen. Elizabeth Warren announced her vision for a revamped corporate tax law, The Wall Street Journal reported Thursday (April 11), an initiative that could raise $1 trillion over 10 years.
Reports said Warren announced her Real Corporate Profits Tax, proposed legislation that would include a 7 percent tax on the largest U.S. corporations and heighten overall corporate tax collections by 30 percent over a decade.
“We need corporate tax reform, but we also need to recognize that enormous companies with armies of lawyers and accountants will always try to exploit any deductions and exemptions that remain,” Sen. Warren said in her announcement. “To raise the revenue we need — and ensure every corporation pays their fair share — we need a new kind of tax that big companies can’t get around.”
Her announcement came the same day that the Center for Public Integrity announced new analysis of the U.S. tax ecosystem, revealing that the number of corporates paying zero taxes doubled from 30 to 60 in the first year of the new Tax Cuts and Jobs Act, which lowered the corporate tax rate to 21 percent.
The Washington, D.C. nonprofit think tank found some companies even saw a less-than-zero tax rate under the new legislation. The firms have a combined $79 billion in pretax income, the report revealed.
“Instead of paying $16.4 billion in taxes, as the new 21 percent corporate tax rate requires, these companies enjoyed a net corporate tax rebate of $4.3 billion, blowing a $20.7 billion hole in the federal budget last year,” the report said, according to NBC News.
Sen. Warren’s proposal would raise the corporate tax rate, reduce the value of some corporate tax deductions, and reverse some of the tax cuts included in the Tax Cuts and Jobs Act, the WSJ said.
According to Gabriel Zucman, an economics professor at the University of California, Berkeley who collaborated with the Warren campaign on the legislative proposal, a key focus for the new rules would address businesses’ ability to shift profits abroad to dodge taxes.