Is the new tax voted in the US a tax on super-profit corporations, says Manon Aubrey? – Editing

Question from Yvan on August 10, 2022.

good morning,

Ask us about the new tax advocated by the Democratic camp in the United States that aims to fund President Joe Biden’s grand plan on climate, taxes and health – or Inflation Reduction Act. You ask us, in fact, if it “Tax on Super Profits”such as those established by many European countries.

This is suggested by MEP La France insoumise (LFI) Manon Aubry, In a tweet posted on Monday, August 8. “The US has also started taxing super-profit companies”I rejoiced.

before being taken, next morningWritten by Nathalie Loiseau, also a Member of the European Parliament but elected under the title La République en Marche, in a tweet ensuring that “Joe Biden is not talking about taxing big corporations but about imposing a minimum tax of 15% […] In France 25%. What is the first then reply that “The 15% tax is of course on super profits” Plus US corporate tax.

What is the tax on super profits?

In France, this topic was discussed during Parliament’s consideration of an amendment to the Finance Act, at the end of July – beginning of August, just before the end of the parliamentary session. Presented to the Assembly from the left, to the Senate by the centrists, a measure consisting in the creation of an extraordinary contribution “symbiosis” It applies to the French groups who became rich thanks to the inflationary crisis. Companies that achieved, in 2021, an additional 20% profit, were targeted, “super profit,” compared to the average of the previous three years. The proposed amendments in this direction, which were opposed by the presidential majority, were completely rejected.

temporary tax

Beyond the French controversy, a tax on super-profit corporations, “It’s a temporary tax that hits companies that have made more profits compared to those in previous years”, summarizes Henri Sterdyniak, an economist who specializes in international economics and tax issues. Thus, super-profit corporations will be taxed “Added to the corporate tax rate”. “It is not the same as a tax on more profits, it is an additional tax on all profits.”complements economist Anne-Laure Delatte, who specializes in finance and European affairs.

In the idea, it is “Make the beneficiaries of the crisis contribute”asks the economic researcher. Countries consider the additional profits to be due “To the rise in oil prices or transportation, for example, so that it is only an annual pension” which they have “invitation to participate”explains Henri Sterdyniak.

This is exactly the logic that three of our European neighbors have followed in recent months. Italy, at the end of March, was the first country to introduce a corporate tax targeting energy companies, which was set at 10%, then increased to 25% at the end of May. Also in May, the United Kingdom decided to introduce a similar tax, relating specifically to profits from hydrocarbon production in the North Sea: due to this 25% tax, “The legal rate that companies in the energy sector suffer from was 40%, rising to 65%”, Comments by Anne Laure Dilat. Latest announcement so far: Spanish government announcement mid-July. Banks and major energy suppliers will soon be taxed on the extraordinary profits made by banks and major energy groups in 2022.

What tax does Joe Biden want?

Hence Manon Aubry’s criticism of the French government: “Soon, there will really only be Emmanuel Macron who will refuse to do this!” The problem is that to justify this blame, the European Parliament is relying on a tax about to be adopted in the United States, which it presents as a tax on super-profits. What is not.

Furthermore, the term “super-profit corporation” was never used when this US tax reform was mentioned. Article dedicated to this topic by Release Referred “Minimum contribution of 15%”. In detail, this measure relates to the corporate tax owed, at the federal level, by all groups that generate more than $1 billion in annual profits. In practice, as explained by Washington Postthese companies will be required to calculate this tax in two ways.

D’une part, elles suivraient la méthode classique, consistant à appliquer le taux statutaire de l’impôt sur les sociétés, de 21%, à leurs bénéfices imposables – autrement dit les bénéfices exésésédés des édurations aux les aux s benefit. On the other hand, they will compute the tax due at the new rate of 15%, related on its part to “accounting income”, that is, profits declared to shareholders before tax deductions. Upon arrival, the higher amount of the two will be kept.

Contrary to what Manon Aubrey has written, the tax of 15% of all profits is therefore not in addition to the 21% corporate tax, but replaces it when it results in a higher tax amount. In all, the Joint Committee on Taxes, a (nonpartisan) US Congressional organization, has calculated that creating this minimum tax could generate about $310 billion over ten years.

This tax development is presented inInflation reduction law US President Joe Biden. It was adopted by the US Senate on Sunday, after eighteen months of debate, and is now being considered by the House of Representatives, with a final vote expected on Friday.

Where it differs from super-profit taxation, it is first and foremost on its time. “In European countries, what has been implemented is an exceptional tax”While“In the United States, it’s a permanent mechanism”notes Anne-Laure Dilat.

Another difference: a ‘Broader goal’. The target was the criterion used to determine which US companies must submit to the minimum contribution of 15%. “Those who make more profits”, in this case at least a billion dollars a year. But the companies involved “Maybe you didn’t earn more thanks to the crisis [inflationniste]or even earned less because of the crisis.”. While European taxes on large corporations specifically target companies for which this crisis has brought significant profits, and therefore primarily the energy sector (as well as the banking sector in the case of Spain).

Finally, the tax on super profits has the effect of increasing the tax rate borne by the state firms that impose it. In the US, what changes is not the corporate tax rate, “It’s the tax base that is being expanded.”, confirms Ann-Laurie Dilatt. The 15% rate applies on a flat base without taking into account the tax breaks enjoyed by large groups. Thus, this measure is intended to combat the tax optimization techniques some of these companies are using, rather than compensating – as allowed by taxing big companies – for profits that have been “unfairly” earned thanks to inflation.

‘France does nothing’

For all these reasons, Natalie Lusso took her freedom to confront Manon Aubrey, who rules with CheckNewsAnd the ‘Misread Democrats’ ads’. Except that, in her response, the MEP Macronist confuses herself by making a comparison between the 15% tax discussed in the US and the French corporate tax, which has a legal rate of 25%, but is related to the taxable income of French companies. However, the two are not comparable, as they are not calculated on the same basis. On the French side, as in the United States, the various tax benefits that companies can claim sometimes create large gaps between the reported income of shareholders and the income declared to the tax authorities.

Manon Aubrey, for her part, keeps it that way “It’s a tax on supercompanies.” but also “Comprehensive corporate tax reform in the United States being undertaken as part of a more comprehensive reform”admit.

Since accounting income will better reflect the excess profits made by some companies, Manon Aubrey believes that this tax will eventually It will tax large corporations with profits of more than a billion dollars.. for the rebels, “We can’t say “There’s a definition for taxes on super-profit corporations, it’s XYZ in terms” We conclude that the United States does not fit there.”. The standard it maintains, for its part, is the search for the greatest “tax justice”: The new US tax will allow “To engage companies that, especially at this time, are making extraordinary profits, all for the sake of social measures”.

Furthermore, if she asserts that this does not make her a tax on super profits, Anne-Laure Delatte joins Manon Aubry on one point: “France does nothing, although in the United States we are trying to raise tax revenues”.

Modernization : August 11 12:40 p.m. Accuracy in American Reform.

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