Warren proposes surtax on large companies’ profits

Sen. Elizabeth Warren (D-Mass.) on Thursday offered a new proposal aimed at increasing the amount of taxes large corporations pay — the latest big policy plan she has released during her 2020 presidential campaign.

Under the proposal, companies would have to pay a 7-percent surtax on worldwide profits over $100 million. It would be implemented on top of any other taxes the corporation has to pay.

The tax would be based on the profits that companies report in their financial statements, which can be greater than the profits reported on tax forms.

About 1,200 public companies would be subject to the tax, and the proposal would raise a little over $1 trillion in revenue over 10 years, according to an estimate from University of California, Berkeley economics professors Emmanuel Saez and Gabriel Zucman.

“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 said in an essay on Medium.

Warren also said that she thinks that “loopholes” need to be closed in the existing corporate tax code, but that her new tax is necessary because “enormous companies with armies of lawyers and accountants will always try to exploit any deductions and exemptions that remain.”

“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,” she said. 

Warren has offered a number of significant policy proposals since entering the 2020 Democratic presidential primary. Other proposals include a wealth tax for high net-worth individuals and a proposal to provide universal access to child care.

Her proposal for a surtax on corporate profits comes as Democrats have attacked Republicans’ 2017 tax-cut law as a boon for the wealthy and corporations. Several Democratic presidential candidates have offered proposals aimed at making the very rich pay more in taxes.

An Amazon spokeswoman said the company pays all the taxes it is required to pay.

“Corporate tax is based on profits, not revenues, and our profits remain modest given retail is a highly competitive, low-margin business and our continued heavy investment,” a statement said. “We are creating tens of thousands of quality jobs each year with industry-leading pay for people of all skill levels, bringing our total workforce in the U.S. to more than 250,000.” 

Warren announced Wednesday that she raised $6 million in the first quarter of this year, which is significantly less than the amount raised by some candidates — such as Sens. Bernie Sanders (I-Vt.) and Kamala Harris (D-Calif.) — but more than the amount raised by others, such as Sens. Cory Booker (D-N.J.) and Amy Klobuchar (D-Minn.).

–This report was updated at 10:38 a.m.