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How Private Equity Lobbying Watered Down the Corporate Minimum Tax

  • August 08, 2022

The new tax is intended to target big companies, like Amazon and Meta, that have for years found ways to lower their tax rates by capitalizing on deductions in the tax code. Tax experts generally favor increasing tax rates — the current corporate rate is 21 percent — or scaling back deductions. But because Republicans were united against that approach, and Democrats did not have enough votes for it, they settled on the corporate minimum tax.

Progressives expressed disappointment after Democrats removed the measure that would have affected businesses that are controlled by private equity and accused Ms. Sinema of being beholden to Wall Street and lobbyists.

“Whatever job she gets with Wall Street after losing her primary, they can’t pay her enough,” Adam Green, co-founder of the Progressive Change Campaign Committee, wrote on Twitter.

The House is expected to pass the Senate bill this week and President Biden to sign it into law soon after. The tax changes would take effect next year, and the Treasury Department would be racing to develop regulations and guidance to interpret parts of the law.

Ms. Sinema said in a tweet on Sunday that she was proud of the outcome of the negotiations, which she said would spur innovation and job creation.

Mark Mazur, a former deputy assistant secretary for tax policy at the Treasury Department, said that the corporate minimum tax was “not the best policy” and that accounting firms were likely combing through the legislation to determine how their clients could avoid the new levy.

Article source: https://www.nytimes.com/2022/08/08/business/corporate-minimum-tax-private-equity.html

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