New Treasury Rules to Generate $250 Billion from Corporate Tax Overhaul
The U.S. Treasury announced proposed rules for a new corporate alternative minimum tax aimed at generating $250 billion over 10 years from large companies. This tax targets firms with $1 billion or more in adjusted financial statement income. The new rules aim to curb tax avoidance and level the playing field for small businesses.
- Country:
- United States
The U.S. Treasury has unveiled new proposed rules for a corporate alternative minimum tax, expected to generate $250 billion in revenues over a decade from approximately 100 large corporations paying an average rate of just 2.6%. The measure targets companies with annual average adjusted financial statement income of $1 billion or more, which often exploit deductions and strategies to minimize their tax obligations.
The Treasury did not disclose the names of the 100 companies likely subject to the tax but noted their current effective tax rate averages 2.6%, with about 60 firms paying less than 1%. The tax was approved under the 2022 Inflation Reduction Act to finance new clean energy tax credits.
Treasury Secretary Janet Yellen stated that the proposed rules mark a significant step toward tackling corporate tax avoidance and creating a fairer tax landscape for small businesses that lack the resources for complex tax reductions. The newly published rules specify limits on deductions to determine adjusted financial statement income and tax liability, effective from the 2024 tax year. Public comments are open until Dec. 12, with a hearing scheduled for Jan 16, 2025.
(With inputs from agencies.)
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