This article analyzes the shortcomings of corporate AMT, which imposes a minimum tax of 15 percent on financial accounting profits for large corporations whose liabilities under the regular corporate tax system fall below that threshold.
The corporate alternative minimum tax, enacted in 2022 as part of the Inflation Reduction Act, imposes a 15% minimum tax on “adjusted financial statement income” for certain large corporations and has multiple shortcomings. CAMT is conceptually flawed, involves very high compliance costs, does not meaningfully change corporations’ incentives, and raises little revenue.
Our analysis examines CAMT’s impact on corporate tax planning and estimated tax revenue, demonstrating that despite imposing substantial new compliance and planning costs, CAMT appears to have done little to change who pays corporate income tax or how much they pay.