Elizabeth Warren, the economic policy pacesetter in the Democratic presidential primary field, wants to raise $1 trillion in government revenue from a new 7% surtax on profits of the largest corporations.
What the Massachusetts senator dubs the "Real Corporate Profits Tax" would apply to worldwide profits exceeding $100 million. The purpose, she says, is to bolster government coffers by preventing corporate giants from exploiting loopholes to avoid federal taxation following the large tax cut enacted by President Donald Trump and a GOP-controlled Congress in December 2017.
"It will make our biggest and most profitable corporations pay more and ensure that none of them can ever make billions and pay zero taxes again," Warren wrote in a Medium post published Thursday morning. "To raise the revenue we need — and ensure every corporation pays their fair share — we need a new kind of tax that big companies can't get around."
The Trump tax cut, following entreaties from corporations for a more globally competitive U.S. system, reduced the top corporate rate to 21% from 35%. But deductions remaining in the IRS code allow some large corporations to reduce their effective rates far below that — in some cases all the way to zero.