New minimum tax could hit Berkshire Hathaway and Amazon hardest, study shows


Berkshire Hathaway Chairman Warren Buffett seen on the annual Berkshire shareholder purchasing day in Omaha, Nebraska, U.S., May 3, 2019.

Scott Morgan | Reuters

Researchers utilized the Inflation Reduction Act’s new 15% company minimum tax onto 2021 firm earnings and discovered that the burden would solely be felt by about 78 corporations, with Berkshire Hathaway and Amazon paying up essentially the most.

The study from the University of North Carolina Tax Center used previous securities filings to map the tax, which works into impact in January, onto corporations’ 2021 earnings.

The researchers discovered that the 15% minimum would have taken a complete of $31.8 billion from 78 corporations in 2021. Berkshire led the estimated payout with $8.33 billion, and Amazon follows behind with $2.77 billion owed based mostly on its 2021 earnings.

The study notes the restrictions of wanting solely at public firm knowledge inside a single 12 months. The researchers acknowledged that these estimates could also be topic to alter, particularly as firm operations change beneath the tax in 2023.

President Joe Biden signed the minimum guide tax into legislation, together with the remainder of the Inflation Reduction Act, in August. The tax is particularly meant to focus on corporations incomes greater than $1 billion per 12 months.

The Joint Committee on Taxation had beforehand estimated that it might have an effect on round 150 corporations, with the prices falling particularly on the manufacturing trade. The bipartisan JCT additionally predicted $34 billion in income within the first 12 months of the tax, barely greater than the theoretical 2021 income estimated at UNC.

According to the study, the next-highest taxes can be paid by Ford, AT&T, eBay and Moderna, all of which might owe greater than $1.2 billion in funds based mostly on their 2021 financials.

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