While conservatives have claimed to suffer from insufferable ‘fact-checking’ on social media, earlier this week President Joe Biden got a taste of that himself.
Biden’s account posted: “Let me give you the facts. In 2020, 55 corporations made $40 billion. And they paid zero in federal taxes. My Inflation Reduction Act puts an end to this.”
Let me give you the facts.
In 2020, 55 corporations made $40 billion. And they paid zero in federal taxes.
My Inflation Reduction Act puts an end to this.
— President Biden (@POTUS) October 29, 2022
Not entirely true, said a ‘context’ update from the Elon Musk-controlled Twitter.
“The Inflation Reduction Act imposed a minimum tax on corporations with average pre-tax earnings greater than $1 billion. Out of the 55 corporations the tweet references, only 14 had earnings greater than $1 billion and would be eligible under Biden’s tax law,” the site posted in response to Biden’s tweet.
“Elon buys Twitter and now they’re fact-checking liberals. Finally. I love it,” Army Ranger and former U.S. Senate candidate Sean Parnell (R-PA) joked.
Reuters explained further that Congress has everything to do with how corporations must pay taxes:
Some regular corporate income tax credits and deductions are still allowed under the minimum tax, including credits for foreign taxes paid.
The carrying forward of prior-year losses to offset future income is also permitted, but only 80% can be applied to reducing taxable income.
Credits for research and development expenses are also allowed, with 75% of the value applied to reducing corporate minimum tax.
At the urging of Democratic Senator Kyrsten Sinema, lawmakers added a provision to preserve deductions on capital investments such as machinery, vehicles and buildings. The exception would allow companies to more quickly offset these expenses against tax bills.
Under another last-minute change to the legislation urged by Sinema, companies controlled by private equity firms are not subject to the corporate minimum tax if they make less than $1 billion of book income, even if that investment firm’s combined portfolio of companies exceeds the threshold.
Some private equity firms may be able to shift assets among companies in their portfolios so that each earns less than the $1 billion threshold to avoid the minimum tax.