2020 Democratic candidate Elizabeth Warren (D-MA) proposed a seven percent tax on corporate profits above $100 million.
Warren published an article to Medium Thursday, where she said that the federal corporate tax rate that big corporations pay relative to what they make in profits went down between 1988 and 2012.
“In a recent eight-year period, 25 big companies alone claimed $286 billion in tax breaks,” she wrote. “And that was before the Republican tax bill slashed the corporate tax rate and handed hundreds of billions of dollars more to corporations.”
Warren blamed “relentless lobbying” for creating “loopholes and exemptions and deductions” in the tax laws. She said the loopholes allowed companies making billions of dollars to pay zero corporate income taxes.
“Amazon reported more than $10 billion in profits and paid zero federal corporate income taxes,” she wrote. “Occidental Petroleum reported $4.1 billion in profits and paid zero federal corporate income taxes.”
Big corporations have lobbied relentlessly to fill our corporate tax rules with so many loopholes and exemptions that even when they report a billion dollars in profits to their investors and the public, they can report much lower “profits” to the IRS—and pay no taxes on them.
— Elizabeth Warren (@ewarren) April 11, 2019
To combat “corporate greed,” Warren said she will push for a “Real Corporate Profits Tax.” Under her tax, Amazon would have to pay $698 million in taxes while Occidental Petroleum would need to pay $280 million. Warren suggested that making a new tax is necessary, since raising the corporate tax rate, according to her, would be ineffective because of its loopholes.
Warren added that companies need to remember that they rely on government to be successful.
“American companies are among the most successful in the world. That success comes from our drive, our ingenuity, and our creativity,” she wrote. “It also comes from a broad American infrastructure —roads and bridges, public safety, telecommunications, education, our legal system — that relies on government investment. Too many of our wealthiest companies have lost sight of this, and instead seek to cash in on all the benefits of America while skipping out on the bill. It’s not right — and we cannot afford to let it continue.”
Warren's statement echoes former President Barack Obama's back in 2012.
Rep. Kevin Brady (R-TX) criticized Warren’s tax plan, saying that it punishes businesses for succeeding.
Let's get @ewarren plan straight:
— Rep. Kevin Brady (@RepKevinBrady) April 11, 2019
- punish U.S. companies for competing/winning around the world
- encourage U.S. companies to move HQ/jobs overseas
- reverse tax reform that made U.S. #1 competitive economy on globe.
What could possibly go wrong... https://t.co/LmbE7Pmgcf
Warren fired back.
I guess Rep. Brady is fine with 60 of the biggest corporations in the US paying $0 in taxes on a combined $79 billion in profits—while the rest of us pay federal taxes to fund our military, our roads, and our bridges.
— Elizabeth Warren (@ewarren) April 11, 2019
I'm not, and my Real Corporate Profits Tax would fix that.