The Senate Democrats passed legislation aiming to reduce the federal deficit by incorporating a 15% minimum tax, along with lowering energy and health care costs and dealing with environmental issues. The Act will theoretically raise $450 billion in revenue.
15% Minimum Corporate Book Tax
The Act includes a 15% minimum tax on C corporations with annual profits exceeding $1billion on income reported by companies to investors (book income). This will be effective for tax years beginning after 2022.
Renewable Energy Credits
The Act provides for several new and expanded renewable energy tax credits such as:
- credits to reduce carbon emission for clean sources of electricity, energy storage, efficient commercial vehicles, and clean fuels.
- credits to encourage development of biofuels, help reduce industrial manufacturing emissions, and support consumer expenditures on energy-efficient residential property and vehicles.
Increased Funding for the IRS
The Act includes funds for IRS tax enforcement and funds for the IRS to prepare and deliver a report to Congress on the cost on developing and running an e-file tax return system.
According to President Biden this Act will reduce the federal deficit by requiring big corporations to pay their fair share of taxes and will help fight inflation with no tax increases to families making under $400,000 a year.
More information on the Act can be found at:
https://www.jw.com/news/senate-passes-tax-changes/#:~:text=Senate%20Passes%20Significant,the%20Tax%20practice.