President Joe Biden attempted to provide Americans with “the facts” about how the Inflation Reduction Act prevents large firms from evading tax regulations.
However, he was swiftly debunked by Twitter for making a false claim.
What did Joe Biden claim?
On Friday, the president said that 55 corporations with more than $40 billion in income in 2020 didn’t pay taxes, a concern that the Inflation Reduction Act purportedly addresses.
“Let me lay out the facts for you. 55 companies made $40 billion in 2020. They also paid no federal taxes,” Biden said on Twitter. “This is no longer the case thanks to my Inflation Reduction Act.”
The Inflation Reduction Act, which has little effect on inflation, imposes a minimum 15% tax on corporations that make more than $1 billion annually on average. The clause is “intended to discourage the wealthiest firms from abusing tax loopholes that enable them to pay very little or no federal income tax,” according to Bloomberg Tax.
Furthermore, according to the Joint Committee on Taxation, only 150 businesses will be subjected to the tax.
What action did Twitter take?
Members of Birdwatch, the platform’s “community-based response to disinformation,” attached a fact-check to Biden’s post.
According to the information snippet, “just 14 of the 55 firms included in the tweet had profits larger than $1 billion and would be liable under Biden’s tax proposal.”
Indeed, Biden’s frequently touted number is based on a paper by the Institute on Taxation and Economic Policy, a left-leaning think tank. According to the research, 55 firms paid no federal taxes while earning more than $40 billion in 2020.
However, as highlighted in the Twitter blurb, just 14 of those firms generated more than $1 billion that year and would thus be subject to the corporation tax imposed under the Inflation Reduction Act.
Ironically, the assertion was fact-checked by the Washington Post in October, and the president was generally absolved of pushing deceptive statements.
“This ’55 corporations’ number is possibly in the ballpark, but readers should be informed that it is an estimate of taxes paid based on business filings, not actual tax returns,” the fact-check said.