Experts take issue with this part of Biden's corporate tax plan
Yahoo Finance's Dan Roberts discusses Joe Biden's tax plan with On The Move.
ADAM SHAPIRO: Word on the Street and Dan Roberts - he's investigating Joe Biden's corporate tax plan and mixed results from people on both sides of the aisle, right?
DAN ROBERTS: Yeah, it's very interesting Adam. And you know that from a seminar you recently organized. And look, folks on both sides - you have Douglas Holtz-Eakin, who is of course an economist and a Republican, and we had Harvard Professor Jason Furman at that event, who served as a Democrat under President Obama. They say that particular fold in Biden's tax proposal is a bad idea, and not the corporate tax rate of 28%. It was written about. That made a lot of headlines.
It is this automatic 15% minimum tax on corporate book income. Book income, of course, is what we see in the earnings reports, and it does not include any taxes or tax deductions that are claimed by companies. Hence, this automatic 15% minimum would most likely hit the worst companies like Amazon. FedEx. And so, obviously, you can see the political appeal for Joe Biden. You know, a lot of Dems want to hit Amazon where it hurts.
But these are people on both sides of the aisle who say it's a bad idea for a number of reasons. One of them is that it hurts R&D spending because it kind of detracts from the depreciation benefit these companies get. Look, it also creates a second system that companies have to follow. You have the existing tax rules and then one other rule. And so, basically, many of these tax law professionals are saying it's confusing better to just change the loopholes these companies enjoy than to introduce another new tax rate.
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