TAX TAKE: Democratic Wishful Thinking on the Corporate Book Income Minimum Tax?
Prospects for the Build Back Better Act (BBBA) have seemed to dim over the last few weeks in light of a number of developments. Word of Senator Joe Manchin's (D-WV) efforts to cobble together a bipartisan climate deal have fueled speculation that any version of BBBA 2.0 might be closer to dead than alive, despite assurances from leadership that members were working behind the scenes to put a package together. And then, early last week, the explosive leak of a draft Supreme Court decision overturning Roe v. Wade only served to move tax even further down the list of legislative priorities.
Despite the fading prospects for BBBA 2.0, Senator Elizabeth Warren (D-MA) made news with respect to one of the more controversial revenue raisers in the House-passed version of BBBA. In remarks she gave during a discussion at the Center for American Progress addressing how to build a fairer tax system last Wednesday, Senator Warren asserted that she has "50 Democrats on board" to vote for the 15 percent corporate minimum tax on book income. This assertion came notwithstanding her admission that talks as to the contents of the rest of the package have stalled. And it's unclear whether all 50 Democrats are supportive of the book income minimum tax. Although Senator Manchin indicated a receptivity to a minimum tax concept in his "agreement" over the summer with Senate Majority Leader Chuck Schumer (D-NY), he still clearly would prefer rate increases. Senator Warren also made no mention of Senator Kyrsten Sinema's (D-AZ) reported demands that the minimum tax make allowances for certain preference items such as bonus depreciation, which would substantially reduce the amount of revenue the provision was originally anticipated to raise. And in recent statements, it doesn't seem Senator Sinema is too keen on a key provision of BBBA 1.0 relating to GILTI and even went so far as to suggest that a reconciliation bill is unlikely to occur at all. Which raises the question: if she's this unenthusiastic, who is this phantom 50th Democratic senator who's going to vote for the minimum tax on book profits?
Things are heating up as we head into the last real window of opportunity that the Democrats have to pass a piece of signature legislation before the midterms. Promises are being made, stories are flying, and the truth is probably on vacation. Stay tuned as the conversation intensifies and whatever deal that might be possible begins to take shape. #TaxTake
Upcoming Speaking Engagements and Events
On May 13, Loren will moderate "The Good, the Bad, the GILTI: Pillar Two and GILTI," a panel discussion at the ABA Section of Taxation Hybrid 2022 May Tax Meeting.
Marc will present "Federal Tax Policy Update," at the Manufacturers Alliance Tax Council Spring Meeting on May 19.
Loren will present "Multilateralism: The New Mode," a panel discussion at the TCPI 2022 Annual Symposium on May 19.
On May 19, Marc and Jorge will present "2022 Federal Tax Policy Update," a webinar sponsored by TEI Chicago, the National Association of Black Accountants (NABA), and The Association of Latino Professionals For America (ALPFA) Chicago.
On June 1, Loren will co-chair "Domestic Recent Tax Developments and Changes in the Tax Environment," a panel discussion at the IFA USA-Italy Joint Meeting.
In the News
In Bloomberg Government, Marc discussed the possibility of adding a semiconductor tax credit to the China competitiveness bill. "The House and Senate bills are so wildly different...and there is a limited window of when this can all be done," Marc said. "Adding a tax provision is viewed as another complicating factor."
The information contained in this communication is not intended as legal advice or as an opinion on specific facts. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. For more information, please contact one of the senders or your existing Miller & Chevalier lawyer contact. The invitation to contact the firm and its lawyers is not to be construed as a solicitation for legal work. Any new lawyer-client relationship will be confirmed in writing.
This, and related communications, are protected by copyright laws and treaties. You may make a single copy for personal use. You may make copies for others, but not for commercial purposes. If you give a copy to anyone else, it must be in its original, unmodified form, and must include all attributions of authorship, copyright notices, and republication notices. Except as described above, it is unlawful to copy, republish, redistribute, and/or alter this presentation without prior written consent of the copyright holder.