The Democrats target companies with giant profits but tiny tax bills
A minimum tax on corporate income seems alluring, but is likely to disappoint
ON THE FACE of things, it seems both absurd and unfair that large American companies regularly whittle down their tax bills, taking advantage of every loophole on offer. One study found that at least 55 big companies incurred no federal taxes at all on their profits in 2020. A proposal being discussed as The Economist went to press, and as the Democratic Party scrambled to fund its social-spending package, seems to offer a popular solution: a minimum tax on corporate earnings as reported to shareholders, rather than as massaged down when reported to tax collectors.
This article appeared in the Finance & economics section of the print edition under the headline “A tale of two profits”
Finance & economics October 30th 2021
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