Corporate minimum tax, possibly unconstitutional billionaire tax, last thing Democrats throw up against the wall

At Dealbreaker, we don’t exactly have a perfect track record for predicting the success of botched tax code rewrites, at least in Congress. So despite the support of mercuriel Kyrsten Sinema for this one, well, we just got a bad feeling.

Senate Democrats on Tuesday announced a 15% minimum tax on large business income, garnering support from a key moderate lawmaker, as they attempt to generate enough money to pay for the social spending program and climate change of President Biden…. Manufacturers and tech companies could be among the hardest hit by the plan, as the tax breaks they currently enjoy, such as the expensing of capital investments or stock options, would effectively be limited…. Affected businesses would still benefit from a range of tax credits available to businesses, including relief for research and development spending, affordable housing, and clean energy initiatives that would allow them to push their business forward. tax rate below 15%. These exceptions could mean that some profitable businesses could still report zero tax bills.

It seems ripe for unintended consequences should it somehow manage to pass. Speaking of uncertainty at the heart of income plans:

The Wyden Plan would impose a one-time tax on unrealized gains to date and then create an annual tax on the net worth of every billionaire. The proposal should address losses, illiquid assets and enforcement. The plan is expected to require annual taxes on publicly traded assets, even if they are not sold. Illiquid assets would likely be taxed upon sale, but with additional fees to offset the possibility of deferring tax.

Here’s the potential problem: The Constitution gives Congress broad powers to impose taxes, but also limits how taxes can be imposed. It includes a requirement that “direct taxes” – a term without a clear definition – be distributed among states, such that residents of each state pay a share of tax payments that is equal to its share of the population. .

It’s almost as if this isn’t the best way to run a country and the fundamental structures of American governance are irreparably shattered.

Corporate minimum tax resurfaces as Democrats hunt for cash [WSJ]
Billionaire’s tax faces likely constitutional challenge [WSJ]

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