by Wolf Richter
Wolf Street
The “minimum book tax” on reported earnings would be a tax incentive to produce realistic earnings reports. Wall Street will fight it furiously.
I was no fan of money-printing interest-rate-repressing Fed Chair Janet Yellen, though she did hike interest rates and kicked off the Fed’s balance sheet reduction. But she’s now getting huge brownie points as Secretary of the Treasury for trying to deal with the catastrophic corporate tax code by including something I have been jabbering about since 2012:
Large corporations – and there are only a few dozen to which this would apply, according to the proposal – should pay income taxes on the inflated and puffed-up income they report to their shareholders under our glorious accounting principles GAAP, rather than paying no taxes, or even getting paid tax benefits, on the losses they report separately to the IRS under the tax code.