A brand new minimal tax might hit Berkshire Hathaway and Amazon hardest, a research reveals
Berkshire Hathaway Chairman Warren Buffett is seen at Berkshire’s annual shareholder buyout day in Omaha, Nebraska, the United States, on May 3, 2019.
Scott Morgan | Reuters
The researchers applied the Anti-Inflation Act’s new 15% minimum tax to corporate earnings in 2021 and found that only about 78 companies would feel the burden, with Berkshire Hathaway and Amazon paying the most.
The University of North Carolina Tax Center’s study used past securities filings to map the tax, which takes effect in January, to companies’ 2021 earnings.
The researchers found that the 15% minimum in 2021 would have cost a total of $31.8 billion from 78 companies. Berkshire led the estimated payout with $8.33 billion, and Amazon follows with $2.77 billion owed based on its earnings in 2021.
The study points to the limitations of just looking at data for publicly traded companies within a single year. The researchers recognized that these estimates are subject to change, particularly if the company’s operations change under tax in 2023.
President Joe Biden signed the statutory minimum book tax into law in August along with the rest of the anti-inflation bill. The tax is specifically aimed at businesses that make more than $1 billion a year.
The Joint Taxation Committee had previously estimated that around 150 companies would be affected, with the costs falling specifically on the manufacturing sector. The bipartisan JCT also forecast revenue of $34 billion in the tax’s first year, slightly more than the theoretical 2021 revenue estimated by the UNC.
According to the study, the next highest taxes would be paid by Ford, AT&T, eBay and Moderna, all of which would owe more than $1.2 billion in payments based on their 2021 financials.