Cracking the Code

Cracking the Code
Author: Andrew Lyon
Publisher: Brookings Institution Press
Total Pages: 180
Release: 2010-12-01
Genre: Business & Economics
ISBN: 9780815708032

The corporate alternative minimum tax (AMT) was hailed in the Tax Reform Act of 1986 as instrumental to ensuring that tax loopholes would not permit corporations to avoid paying their fair share of tax liability. In 1995, less than ten years later, repeal of the AMT was pledged as part of the Republican Party's "Contract with America" and passed by the House of Representatives. Opponents of the AMT object that it penalizes new investment by firms and prevents the use of legitimate deductions. Its defenders tout the ability of the AMT to address public perceptions of unfairness in the tax system. At first glance, the debate over the AMT seems to be another example of the classic struggle between equity and efficiency. But, as this book reveals, there are serious flaws in the arguments used on both sides of this issue. As a result, the AMT may fail to achieve any notable equity objectives and may miss the opportunity to make significant improvements in the efficiency with which the nation's scarce capital is employed. Whether or not reforms of the AMT are ultimately enacted, the debate over the AMT raises fundamental questions of tax policy that will persist: Who benefits from tax subsidies? How much should the tax code be used to direct resources in the economy? If corporate taxes are ultimately borne by individuals, how do corporate tax provisions affect fairness? Andrew Lyon opens these topics up to a wide audience, presenting new data on the impact of the AMT, and offering suggestions for future policy reform. He argues that the legislative desire to respond to an apparent inequity should be channeled into considering whether there are efficiency reasons for reducing the tax advantages observed. The best solutions to these considerations, he contends, are not found in a minimum tax.

Corporate Alternative Minimum Tax

Corporate Alternative Minimum Tax
Author: United States. Congress. House. Committee on Ways and Means. Subcommittee on Select Revenue Measures
Publisher:
Total Pages: 356
Release: 1989
Genre: Corporations
ISBN:

Corporate Alternative Minimum Tax

Corporate Alternative Minimum Tax
Author: Lisa M. Starczewski
Publisher:
Total Pages:
Release:
Genre: Alternative minimum tax
ISBN: 9781617469589

... analyzes the imposition of the Corporate Alternative Minimum Tax (AMT), as well as the special rules ([sections] 55 and 59) concerning application of this tax.

Cracking the Code

Cracking the Code
Author: Andrew B. Lyon
Publisher: Brookings Inst Press
Total Pages: 156
Release: 1997
Genre: Business & Economics
ISBN: 9780815753247

Andrew Lyon presents new data on the impact of the corporate alternative minimum tax (AMT), and offers suggestions for future policy reform. He argues that the legislative desire to respond to an apparent inequity should be channeled into considering whether there are efficiency reasons for reducing the tax advantages observed.

Alternative Minimum Tax

Alternative Minimum Tax
Author: United States. Congress. Senate. Committee on Finance
Publisher:
Total Pages: 176
Release: 1995
Genre: Business & Economics
ISBN:

A Firm Lower Bound: Characteristics and Impact of Corporate Minimum Taxation

A Firm Lower Bound: Characteristics and Impact of Corporate Minimum Taxation
Author: Aqib Aslam
Publisher: International Monetary Fund
Total Pages: 50
Release: 2021-06-08
Genre: Business & Economics
ISBN: 1513561073

This paper examines the role of minimum taxes and attempts to quantify their impact on economic activity. Minimum taxes can be effective at shoring up the corporate tax base and enhancing the perceived equity of the tax system, potentially motivating broader taxpayer compliance. Where political and administrative constraints prevent reforms to the standard corporate income tax, a minimum tax can help mitigate base erosion from excessive tax incentives and avoidance. Using a new panel dataset that catalogues changes in minimum tax regimes over time around the world, firm-level analysis suggests that the introduction or reform of a minimum tax is associated with an increase in the average effective tax rate of just over 1.5 percentage points with respect to turnover and of around 10 percent with respect to operating income. Minimum taxes based on modified corporate income lead to the largest increases in effective tax rates, followed by those based on assets and turnover.

Alternative Minimum Tax

Alternative Minimum Tax
Author: United States. Congress. Senate. Committee on Finance. Subcommittee on Taxation
Publisher:
Total Pages: 104
Release: 1992
Genre: Business & Economics
ISBN:

Tax Policy

Tax Policy
Author: U S Government Accountability Office (G
Publisher: BiblioGov
Total Pages: 84
Release: 2013-06
Genre:
ISBN: 9781289008895

Pursuant to a congressional request, GAO provided information on the corporate alternative minimum tax (AMT), focusing on: (1) the corporations that paid AMT between 1987 and 1992; (2) whether AMT achieved its purpose; and (3) how AMT might affect corporate investment. GAO found that: (1) AMT accelerated tax payments of $27.4 billion and corporations used credits totalling $5.8 billion from 1987 to 1992; (2) at the end of 1992, corporations had accumulated $21.6 billion in credits that would result in lower tax revenues in the future; (3) of the 2.1 million corporations subject to AMT, 2,000 large corporations paid 85 percent of all AMT in 1992; (4) the two AMT provisions that produced the largest increases in taxable income were the depreciation adjustment, used by 87 percent of all AMT payers, and the adjusted current earnings adjustment, used by 67 percent of all AMT payers; (5) manufacturing, transportation, and finance industries paid the most AMT; (6) AMT has achieved its objectives of making profitable corporations pay tax and causing corporations that report positive amounts of income in a particular year to pay some tax in that year; (7) the effects of AMT on corporate investment are unclear due to insufficient data; and (8) while AMT might reduce present cash flows, future cash flows may be enhanced as taxpayers recover AMT credits.