Ending Corporate Greed Act
The bill targets taxpayers defined as corporations, excluding regulated investment companies, real estate investment trusts, and S corporations, with average annual gross receipts exceeding $500 million over the previous three-taxable-year period. If enacted, it would substantially shift the fiscal landscape for larger corporations, redistributing revenue in a way that proponents argue could fund essential programs or reduce deficits. The implementation of such a tax is scheduled to begin for taxable years starting after December 31, 2023.
SB4642, also known as the 'Ending Corporate Greed Act', proposes a significant modification to the tax code by imposing a 95% income tax on the excess profits of corporations with substantial gross receipts. The definition of excess profits is based on the modified taxable income exceeding an averaged inflation-adjusted threshold set from tax years 2015 to 2019. This bill aims to address concerns regarding corporations that have reported substantial gains, particularly during times of economic distress while other sectors struggle.
Debate surrounding SB4642 is likely to center on issues of fairness and economic impact. Proponents claim that the act would deter excessive profit-taking and promote equity in the economic system, counteracting the perception of corporate greed that has persisted in light of growing inequalities. Opponents, especially from corporate and conservative sectors, may argue that the high tax rate could lead to negative economic consequences such as reduced investment, job creation, or even corporate migration to lower-tax jurisdictions. The effectiveness of the bill in achieving its objectives will be a critical point of contention among lawmakers.