Republican members of the Senate Finance Committee are urging their senate colleague to reconsider efforts to implement a tax on financial statement income of U.S. companies.
This minimum book income tax would tax corporations on the income they report to shareholders rather than their taxable income. The Biden administration has proposed a 15 percent minimum book income tax.
According to tax experts, the book income, reported in financial statements, may result in a larger tax bill than the taxes on the regular income tax that corporations report on tax returns.
“This fundamentally flawed proposal, which has not been properly vetted by either Congressional tax-writing committee, risks severely harming American manufacturers, exacerbating supply-chain disruptions, and ultimately costing U.S. jobs and investment. While Republicans and Democrats may disagree on the best tax policy to create high-paying U.S. jobs and facilitate lasting economic growth, both parties rejected a previously enacted book minimum tax due to its numerous flaws and negative effects. Now is not the time to resurrect a harmful policy that would overwhelmingly hit American manufacturers and supply chains, as well as undercut critical research and development and investment in renewable energy and other emerging technologies,” the Republicans on the Senate Finance Committee wrote in a letter to their Senate colleagues.
Sen. Mike Crapo (R-ID) is the ranking member of the committee.
“As currently proposed, the book minimum tax would impose a 15 percent minimum tax on American businesses, though not on the income they are required to report to the IRS—so-called taxable income. Rather, the tax would be levied on income they report for financial statement purposes, known as book income. In doing so, the proposal would forgo taxation based on the tax code in favor of accounting standards, which are determined without Congressional oversight and may not reflect current realities of the business cycle,” they added.
They said this should not be pursued without proper consideration by either the Senate Finance Committee or the House Ways and Means Committee in a hearing or markup.