Democratic presidential candidate Joe Biden is planning to pay for his policy proposals in part with a new tax aimed at preventing large corporations from paying zero in taxes, Bloomberg News reported Wednesday.
Under a proposal Bloomberg obtained, the former vice president would call for a 10-percent minimum tax on corporations’ book income, which can differ from the income reported on federal income tax returns. The proposal is targeted at businesses with more than $100 million in net income in the United States that paid zero or negative federal income taxes.
The Biden campaign estimates that the proposal would raise $400 billion in federal revenue over 10 years, Bloomberg reported.
The proposal comes amid a push from progressives for higher taxes on the wealthy and corporations, and frustration among Democrats at reports that companies such as Amazon have paid zero in federal income taxes in certain years.
One of Biden’s rivals for the Democratic presidential nomination, Sen. Elizabeth Warren (D-Mass.), has offered a similar proposal, calling for a 7-percent surtax on corporate profits over $100 million.
The Biden tax plan Bloomberg obtained also calls for doubling the tax rate to 21 percent on a minimum tax on foreign profits created by President Trump‘s 2017 tax law. It also calls for $200 billion in sanctions on countries that make it easier for companies to illegally avoid taxes, Bloomberg reported.
The plan includes as well several tax proposals that Biden has previously mentioned, including raising the corporate income tax rate from 21 percent to 28 percent, raising the top individual income tax rate from 37 percent to 39.6 percent, taxing capital gains as ordinary income for people with income over $1 million, and ending the “step up in basis” tax break that lowers capital gains tax liability on investments passed on to heirs.
In total, Biden is estimating that his various tax proposals would raise more than $3.4 trillion, enough to pay for climate and infrastructure, health care and higher education plans that are estimated to cost $3.2 trillion, Bloomberg reported.
Biden has taken aim at other presidential candidates for a lack of thoroughness on paying for their spending proposals. In debates earlier this year, Biden criticized Warren and Sen. Bernie Sanders (I-Vt.) for not being detailed about how they would fully pay for “Medicare for All.” Warren subsequently released a tax plan that specified how she planned to pay for her health plan.
“The vice president does think it’s very important to be clear with the American people regarding how you’re going to pay for things in order to demonstrate they can actually get it done,” said Biden policy director Stef Feldman told Bloomberg.
Feldman added that Biden “wants to make sure that he’s putting proposals out there that he can actually deliver on for folks.”
“He thinks that in many ways it makes it easier for people to buy into the idea that we should be making these investments because they respond to it along the lines of, ‘Oh, you know what, it does seem like wealthy people can pay a little bit more if what we get is this,’” Feldman said.