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Corporations that pay little in taxes want Kyrsten Sinema to kill the corporate minimum tax

By: - August 4, 2022 4:14 pm

Danny Seiden, president and CEO of the Arizona Chamber of Commerce and Industry, interviews U.S. Sen. Kyrsten Sinema at an April 2022 event the Chamber held in Phoenix. Photo by Gage Skidmore | Flickr/CC BY-SA 2.0

Corporations aiming to persuade U.S. Sen. Kyrsten Sinema to push for major changes to tax increase provisions in the $740 billion domestic spending bill would see a hit to their bottom lines if the measure’s corporate minimum tax remains unchanged.

The Arizona Chamber of Commerce and Industry this week launched a six-figure ad blitz opposing the 15% corporate minimum tax that the legislation, known officially as the Inflation Reduction Act. The ads are direct pressure on Sinema, who is seen as the person who holds the measure’s fate in her hands; without her support, the spending plan cannot pass.

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The legislation would require companies that make over $1 billion in profit a year to pay no less than 15% in federal taxes on what’s known as their “book income” — essentially, profits that are reported to shareholders, not the total earnings reported to the Internal Revenue Service — with adjustments for things like foreign taxes and credits for research and development. According to the Wall Street Journal, it would mostly affect large manufacturers

But a new report by progressive government watchdog group Accountable.US shows that a number of the Arizona Chamber’s members paid some of the lowest effective tax rates on billions of dollars of earnings in 2021. Those tax savings have been poured into stock buybacks, dividends for stockholders and acquisitions.

For instance, Bank of America — which pays annual dues to the Arizona Chamber of between $15,000 and $24,999 and has a seat on the board of directors — earned $31 billion in 2021, but paid an effective tax rate of just 3.5%. That same year, it paid out $32 billion on “shareholder handouts,” including stock repurchases, Accountable.US found. 

And AT&T, which pays more than $10,000 in dues and has a seat on the Chamber’s board, paid no taxes in 2021, despite earning $29.6 billion. Instead, it claimed a $1.2 billion refund. In 2021, the company paid nearly $15.1 billion in dividends, and in the first half of 2022, AT&T spent more than $5.8 billion on shareholder dividends. 

Other Arizona Chamber corporate members that paid far less than the proposed corporate minimum tax include Amazon (6.1% on $35.1 billion in earnings), Microsoft (9.7% on $33.7 billion in earnings), UPS (9.9% on $1.4 billion in earnings) and Verizon (6.9% on $27.2 billion in earnings).

Many of the same companies that claim they can’t afford to pay a fair amount managed to find billions of dollars to spend on acquisitions and giveaways to wealthy investors,” Accountable.US spokeswoman Liz Zelnick said in a statement to the Arizona Mirror. “Congress has a historic opportunity to rein in corporate profiteering to bring down costs for consumers and kickstart an economy that works for everyone, not just millionaires and wealthy corporations.” 

A request for comment to Danny Seiden, the CEO and president of the Arizona Chamber, was not answered. 

But the corporate complaints about the climate reconciliation bill are having an effect on Sinema, who is eyeing changes to the proposal — particularly its tax provisions

Bloomberg reported Wednesday that Sinema could push to change the corporate minimum tax proposal to let companies still claim depreciation tax breaks for their investments in equipment and facilities, something not allowed in the bill’s current form. That could shave tens of billions of dollars of revenue from the proposal, potentially meaning less spending on combating climate change and health care.

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Jim Small
Jim Small

Jim Small is a native Arizonan and has covered state government, policy and politics since 2004, with a focus on investigative and in-depth policy reporting, first as a reporter for the Arizona Capitol Times, then as editor of the paper and its prestigious sister publications, the Yellow Sheet Report and Arizona Legislative Report. Under his guidance, the Capitol Times won numerous state, regional and national awards for its accountability journalism and probing investigations into state government operations.

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