Barrasso Introduces Bill to Repeal Part of Inflation Reduction Act
On Thursday, Wyoming Senator John Barrasso announced in a press release that he has introduced the 'Repealing the Ill-Conceived and Problematic Book Minimum Tax Act,' which is cosponsored by Wyoming's other senator, Cynthia Lummis.
The bill would repeal two sections of the Inflation Reduction Act (IRA), which was passed in August, which imposed a 15% corporate alternative minimum tax, or book tax, on certain companies
That tax of 15% is only imposed on corporations that make over $1 billion on average over three years, though considerations do apply such as whether that corporation is foreign or not, and based on the determination of the Secretary of the Treasury on whether the company in question is an 'applicable corporation.'
The money raised through this tax, around $313 billion is being used to fund many of the provisions in the IRA, such as providing tax incentives for building renewable energy projects and capping insulin for Medicare recipients at $35.
Barrasso said in the release:
"The book minimum tax is another reckless power grab by the Democrats to squeeze hardworking Americans dry. Policies like this only raise taxes on workers and consumers, resulting in wage cuts and jobs moving overseas," Barrasso said. "We need to repeal this unfair tax to ensure companies are investing in America, creating more American jobs, and unleashing American energy."
While it is a complicated issue, there is a problem of large companies paying little to no federal income tax, and the book tax could be a way for corporations to pay more of a fair share.
However, while a study by the Institute on Taxation and Economic Policy showed that 55 corporations paid $0 in federal taxes in 2020, there are some issues with their assessment leading to that claim not being entirely accurate.
The bill is cosponsored by 12 Republican senators, Marsha Blackburn, John Boozman, Mike Braun, Bill Cassidy, Mike Crapo, James Lankford, Cynthia Lummis, Rob Portman, Jim Risch, Pat Toomey, Todd Young, and Roger Wicke.
A companion piece of legislation has been introduced in the House of Representatives by Texas Republican Jodey Arrington.
It is unlikely that either piece of legislation will pass, as Democrats are in control of the House and Senate and there's little reason for them to pull back on a recently passed bill like the IRA.
According to the release, the legislation is supported by the American Petroleum Institute, the National Mining Association, the National Taxpayers Union, the U.S. Chamber of Commerce, and the Western Energy Alliance.
The release also quotes representatives from each of those organizations agreeing with Barrasso that the book tax increase is bad because it harms the U.S. energy industry, increases inflation, and reduces innovation.