U.S. Senators Introduce Bill To Repeal Harmful Book Tax

Last week, Sen. John Barrasso (R-Wy.) and 11 Republican Senate colleagues introduced a bill to repeal the 15 percent corporate book minimum tax that was increased as part of the Inflation Reduction Act (IRA) that Congress approved and President Joe Biden signed into law earlier this year.

The book minimum tax is an alternative minimum tax on the financial statement, or “book,” income of certain corporations. According to Sen. Barrasso the new levy will raise taxes on American businesses by $222 billion. As the nonpartisan, nonprofit Tax Foundation explained, the book tax will have disparate impacts across industries and companies since use of accelerated depreciation and other items that are treated differently in book and tax accounting, including stock-based compensation and spectrum expenses.

As a reminder, MSCI joined other trade associations this summer to send a a letter to lawmakers opposing the inclusion of the book tax in the IRA in part because the nonpartisan Joint Committee on Taxation found nearly 50 percent of the burden would fall on manufacturers. Additionally, the NAM found that in 2023 alone, the tax would result in 218,108 fewer jobs, reduce real economic growth by $68.45 billion, and decrease total wages by $17.11 billion.

MSCI also signed another letter this one organized by the U.S. Chamber of Commerce and including 250 other organizations, that said the book tax “would be neither simple nor administrable,” would pose “a competitive disadvantage to U.S.-headquartered businesses while increasing the incidence of unrelieved double taxation,” and would have a detrimental effect on the quality of financial reporting.

While this legislation is unlikely to gain support in the current Congress, MSCI will continue to monitor this issue and update its members through Connecting the Dots.