Business & Lobbying

Retail group backs minimum corporate tax, increased IRS enforcement

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The Retail Industry Leaders Association (RILA) on Thursday urged Democratic lawmakers to implement a minimum corporate tax and boost tax enforcement in their proposed $3.5 trillion spending plan. 

The trade association, which represents retail giants such as Target, Home Depot and Walgreens, opposes the plan’s proposed corporate tax hikes. But it’s breaking from other business groups in calling on Congress to crack down on tax avoidance.  

“The Biden-Harris agenda spoke a lot about tax fairness and making sure that everybody pays their fair share. A corporate tax increase alone doesn’t achieve that,” said Hana Greenberg, RILA’s recently hired vice president of tax. 

“There’s corporations that, no matter what you make the corporate tax rate, will not pay taxes, and there needs to be something to make sure that everybody is contributing what they need to for our country to run,” she added.

RILA sent a letter to congressional leaders Thursday urging them to “to ensure that all companies pay at least a minimum tax before an increase in the corporate tax rate is considered.” The group asked lawmakers to provide the Internal Revenue Service with more resources to go after tax evaders. 

President Biden has proposed both of those options to pay for Democrats’ massive spending bill, which aims to invest in climate, child care and other priorities. The House Ways and Means Committee met Thursday to discuss the specifics of tax changes.

RILA argued in its letter that by increasing tax enforcement and instituting a minimum tax, Democrats could pay for many of their priorities without raising the corporate rate. 

Greenberg, who has connections to both of the key committees deciding tax changes, is leading the group’s lobbying push. She most recently served as chief of staff to Rep. Ron Kind (D-Wis.), a member of the Ways and Means Committee, and previously worked on Senate Finance Committee issues for Senate Majority Leader Charles Schumer (D-N.Y.).

Retailers generally don’t benefit from some of the more lucrative tax deductions and incentives that other industries use to avoid paying federal taxes. They’re also mostly based in the U.S. and wouldn’t be as hard hit by Democrats’ proposed 15 percent minimum tax on overseas income that business lobbyists aim to defeat. 

The National Retail Federation (NRF), another lobbying group representing retailers, declined to endorse tax changes Thursday, reiterating its opposition to Democrats’ spending package.

“While some alternatives to a higher corporate rate have merit, it is the flawed size and scope of the underlying reconciliation package that has Congress considering the imposition of damaging tax hikes on job creators,” NRF Senior Vice President of Government Relations David French said in a statement. “That is why we remain resolute in our opposition to the spending plan.”

Democrats have proposed raising the corporate tax rate from 21 to 28 percent, a measure that both retail groups strongly oppose, arguing that it would damage job growth.

Business lobbyists expect the corporate tax rate to increase to around 25 percent, the number Sen. Joe Manchin (D-W.Va.) said he’d be comfortable with. But tax hikes could shrink further after Manchin reportedly said he’d be open to spending just $1.5 trillion.

Democrats have no room for error in the 50-50 Senate, where only one defection could doom their party-line spending plan. 

Tags Charles Schumer Chuck Schumer Enforcement IRS Joe Biden Joe Manchin minimum tax National Retail Federation retail Retail Industry Leaders Association Ron Kind tax hike taxes

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