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1 Kyle Pomerleau, An Analysis of Senator Warren's 'Real Corporate Profits Tax' 1 (2019)

handle is hein.taxfoundation/asosrrs0001 and id is 1 raw text is: FISCAL FACT No. 650 Apr. 2019 The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy at the federal, state, local, and global levels. We are a 501(c)(3) nonprofit organization. ©2019 Tax Foundation Distributed under Creative Commons CC-BY-NC 4.0 Editor, Rachel Shuster Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 taxfoundation.org An Analysis of Senator Warren's 'Real Corporate Profits Tax' Kyle Pomerleau Chief Economist and Vice President of Economic Analysis Key Findings Senator Elizabeth Warren (D-MA) released a proposal for a surtax on corporate profits called the Real Corporate Profits Tax. The Real Corporate Profits Tax would be equal to 7 percent of a corporation's profits as reported on its financial statement with an exemption for the first $100 million in profits. According to the Tax Foundation Model, the Real Corporate Profits Tax would reduce long-run output by 1.9 percent, shrink the capital stock by 3.3 percent, and reduce wages by 1.5 percent. The Real Corporate Profits Tax would raise approximately $872 billion between 2020 and 2029 on a conventional basis. The smaller projected economy over the next decade would result in lower individual income, payroll, and excise tax revenue collections. As a result, we estimate that this tax would increase federal revenue by $476 billion between 2020 and 2029 on a dynamic basis. The Real Corporate Profits Tax would reduce after-tax income for taxpayers at all income levels. However, it would raise taxes more for high-income taxpayers, increasing the progressivity of the U.S. tax code.

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