July 03, 2024

Warren, King, Bennet, and Beyer to Treasury: Quickly Finalize Strong Rules for Corporate Minimum Tax on Billionaire Corporations

Passed in the Inflation Reduction Act, the Corporate Alternative Minimum Tax will raise $222 billion; President Biden’s proposal to strengthen it would raise another $137 billion. 

In order to ensure giant corporations begin paying their fair share, Treasury and IRS must act quickly to issue strong implementing regulations. 

Text of Letter (PDF)

Washington, D.C. — U.S. Senators Elizabeth Warren (D-Mass.), Angus King (I-Maine), Michael Bennett (D-Colo.), and U.S. Representative Don Beyer (D-Va.) called on Treasury Secretary Janet Yellen (Treasury) to fully implement the 15% Corporate Alternative Minimum Tax (CAMT) signed into law by President Biden in the Inflation Reduction Act two years ago. Despite having previously indicated that rules would be released in early 2024, Treasury has yet to finalize key rules that would address complexities and preemptively stop corporate attempts to avoid paying their fair share. 

For decades, corporations have exploited loopholes within the tax code to avoid paying taxes, shortchanging the government billions of dollars and squeezing America’s middle class. The 2017 Trump tax cuts slashed the corporate income tax rate from 35 to 21 percent and created new corporate loopholes, resulting in corporations paying a significantly reduced amount of income tax, or paying nothing at all. 

The CAMT represents a historic step to address corporate tax evaders, requiring that when companies report over $1 billion in profits to their shareholders, they must pay at least 15 percent of those profits in taxes. This is a signature accomplishment of Congressional Democrats and President Biden, raising $222 billion to fund critical investments in clean energy jobs and technology to combat climate change. President Biden has made strengthening the CAMT a key part of his FY2025 Budget, proposing an increased rate of 21 percent, which would raise an additional $137 billion.

“(T)he Treasury Department has a critical role to play in the implementation of the CAMT and must roll out strong and timely rules to ensure giant corporations begin paying their fair share,” wrote the lawmakers

In order to fully realize the gains from the CAMT, the Treasury Department and Internal Revenue Service must act quickly to finalize key rules. To date, Treasury and the IRS have only issued preliminary guidance on how to calculate a corporation’s “adjusted financial statement income” (AFSI), a key factor in determining a company’s final tax bill.  

“We appreciate your thoughtful work to implement this historic corporate tax legislation. We urge you to quickly finalize strong rules to implement the corporate minimum tax to ensure that the largest corporations begin to pay their fair share.” concluded the lawmakers. 

Senator Warren has led the fight to close tax loopholes for the wealthy and giant corporations to ensure a more fair tax system: 

  • In June 2024, Senator Warren delivered remarks at the Washington Center for Equitable Growth to set the agenda on taxes ahead of the 2025 tax fight and urge Democrats to back President Biden’s agenda to tax the rich. Senator Warren’s call came as Congress prepared for major tax policy changes as a large portion of the 2017 Republican tax cuts for the wealthy were set to expire. 
  • In March 2024, Senator Warren, along with U.S. Representatives Pramila Jayapal (D-Wash.) and Brendan Boyle (D-Pa.), reintroduced the Ultra-Millionaire Tax Act, popular, comprehensive legislation that would bring in at least $3 trillion in revenue over 10 years by requiring that the top 0.05 percent of American households chip in 2 cents for every dollar of wealth over $50 million. The newly introduced version of the bill included stronger rules on trusts, a common method the ultra-wealthy utilize to avoid paying taxes that cost the federal government between $5 and $7 billion annually. 
  • In November 2023, at a hearing of the Senate Finance Committee, Senator Warren called out efforts by lobbyists for giant corporations trying to extend three of the biggest corporate giveaways in the Trump tax cuts: bonus depreciation, R&D expensing, and looser limits on net interest deduction. 
  • In October 2023, Senators Warren, Sheldon Whitehouse (D-R.I.), Chris Van Hollen (D-Md.), and Bernie Sanders (I-Vt.) sent a letter to Secretary Janet Yellen and Internal Revenue Service (IRS) Commissioner Daniel Werfel, urging them to proactively use the Treasury Department’s rulemaking authority to close tax loopholes that create inconsistency and unfairness in the tax system and threaten the government’s ability to raise important revenue.
  • In August 2023, Senators Warren, Bob Casey (D-Pa.), Richard Blumenthal (D-Conn.), and Sanders sent a letter to the Treasury and IRS, urging them to quickly propose and implement strong rules that close loopholes exploited by crypto tax evaders.
  • In April 2023, Senator Warren sent a letter to Secretary Yellen and Commissioner Werfel, urging them to follow through on the commitments of the Biden administration by examining and taking concrete steps to address racial inequities in tax benefits and enforcement.
  • In March 2023, Senators Warren, Van Hollen, Sanders, and Whitehouse sent a letter to Treasury Secretary Janet Yellen, urging her to use the full extent of the Treasury Department’s regulatory authority to crack down on the ultra-wealthy’s use of trusts to dodge paying their fair share in taxes.