Experts take issue with this part of Biden's corporate tax plan

Yahoo Finance's Dan Roberts joins On The Move to discuss Joe Biden's tax plan.

Video Transcript

ADAM SHAPIRO: Word on the Street, and Dan Roberts-- he is looking into Joe Biden's corporate tax plan, and mixed results from people on both sides of the aisle, right?

DAN ROBERTS: Yeah, it's very interesting, Adam. And you know about this from a recent kind of seminar that you hosted. And look, people on both sides-- you've got Douglas Holtz-Eakin, who of course is an economist and a Republican, and we had Harvard professor Jason Furman at this event, who served under President Obama as a Democrat. They say that this specific wrinkle in Biden's tax proposal is a bad idea, and it isn't the 28% corporate tax rate. That's been written about. That's attracted a lot of headlines.

It's this automatic minimum 15% tax on the book income of companies. Now of course, book income is what we see in earnings reports, and it doesn't include taxes or tax deductions that are legal that companies claim, and so of course this 15% automatic minimum would most likely hit the worst companies like Amazon, FedEx. And so you can obviously see the political appeal for Joe Biden. You know, a lot of Dems want to hit Amazon where it hurts.

But these are people on both sides of the aisle who say that it's a bad idea for a range of reasons, one of them being it hurts R&D spending because it kind of detracts from the depreciation benefit that these companies get. Look, it also creates a second system that companies have to follow. You've got the existing tax rules, and then you have another rule on top of that. And so a lot of these tax law profs basically say it's confusing, better to just change the loopholes these companies enjoy rather than yet another new rate implemented.