INVESTING BITCOIN CANNABIS CRYPTOCURRENCY ETFS EARNINGS FIXED INCOME Search HOME INVESTING WHAT JEROME POWELL'S RENOMINATION MEANS FOR THE MARKETS NOV 22, 2021 1:54 PM EST New Billionaires' Tax May Spark Questionable Accounting, Critics Say Critics say companies may now look beyond generally accepted accounting principles to show investors how much they earn. VERONIKA BONDARENKO Now awaiting a Senate vote, the proposal would require those with over $1 billion in assets or $100 million earnings a year to pay a 15% tax based on pretax income reported to investors, rather than waiting until holdings are sold. David Zion, head of the accounting and tax research firm Zion Research Group, told the Wall Street Journal that such a bill could encourage affected companies to look beyond generally accepted accounting principles (GAAP) to show investors how much they earn. Intended to help fund social programs like healthcare and education, the bill would only affect around 200 of the country's largest publicly-traded companies. But taxing book income, which is what companies typically provide investors, can fundamentally change how businesses report earnings since revenue deductions are typically not included in that number. "You’re building from ground up if you’re going with the book income base as opposed to a variation of a taxable income model, which is remodeling an existing structure," Helen Carlier, the global head of tax for Motorola ( (MSI) - Get Motorola Solutions, Inc. (MOS) Report), told the WSJ. How to Find Happiness in Retirement - Here’s What the Experts Say Houston-based CenterPoint Energy ( (CNP-B) - Get Centerpoint Energy Inc Deposit Shs Repr 1/20th 6 % Cum Conv Red Pfd Shs Series B Report)'s Chief Financial Officer Jason Wells said that some companies may put off buying expensive equipment in order to report higher earnings to investors. And Financial Accounting Standards Board Chairman Richard Jones argued that it could steer the organization away from its mission of making sure companies accurately inform investors, instead forcing it to focus on raising tax revenue. "It would be an additional pressure, there’s no doubt, on our mission and what we do," he told the WSJ last week. BY VERONIKA BONDARENKO SEE MORE Terms Of Use Reviews Privacy Policy Advertise Market Holidays 2021 Customer Service Data Topic Dictionary Subscriptions © 2021 TheStreet, Inc. All rights reserved. Action Alerts PLUS is a registered trademark of TheStreet, Inc.