The Inflation Reduction Act, which President Joe Biden is poised to sign on Tuesday, will raise taxes on companies by a net $197 billion over the next decade.
The 15% book minimum tax enacted under the new legislation has differing effects across multiple industries, according to a Friday analysis from the Tax Foundation, which explained that the provisions “would have distortionary impacts on investment, and may prove ineffective as a stable revenue raiser.”
Companies in real estate and leasing will face $11 billion in new taxes, representing 12.7% of the sector’s total pretax income — the highest of any other industry. Yet real estate has seen dramatic cost increases over the past two years, with average single-family home prices rising from $322,600 in the second quarter of 2020 to $433,100 in the first quarter of 2022, according to data from the Department of Housing and Urban Development.
Beyond real estate, the mining, construction, and transportation and warehousing sectors will respectively lose 4.6%, 3.2%, and 1.8% of pretax income.
“These industries are especially heavily impacted because they are at the intersection of the different book-tax gaps targeted by the book minimum tax,” according to the analysis, which specifically noted “temporary timing differences between financial and taxable income” and “deliberate tax incentives created by Congress and special items that show up in one income definition but not the other.”
Though the Inflation…
Read Full Article from www.dailywire.com