Resolution to Overturn CAMT Guidance Would Reduce Deficits
The Senate is expected to vote today on a Congressional Review Act (CRA) resolution to overturn Treasury Department guidance that erodes some of the revenue collection from the Corporate Alternative Minimum Tax (CAMT), sometimes called the Book Minimum Tax (BMT). Based on estimates from the Joint Committee on Taxation, this guidance diminishes the savings from the policy by $10 billion over ten years. CRA resolutions require only a simple majority in the Senate but must also pass the House and be signed by the President to take effect.
The guidance in question gives large corporations flexibility in how they calculate income from partnership investments when determining their CAMT liability. In practice, analysts have warned this allows corporations to reduce taxation of partnership income and would encourage the abuse of partnerships as a tax-avoidance strategy.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
The Administration is eroding the tax code through executive action. It wasn’t right when the last President enacted unilateral deficit increases, and it isn’t right when this one does.
Policymakers enacted the Corporate Alternative Minimum Tax in 2022 to generate new revenue from low-taxed corporations. If current policymakers don’t like that tax, they should repeal and replace it through legislation. Instead, the Administration is taking a “death by a thousand cuts” approach to weaken the tax little-by-little.
We ought to be strengthening the tax base and improving tax enforcement, not opening up new loopholes that undermine the intent of the law.
The current Congressional Review Act measure would help restore the Corporate Alternative Minimum Tax to its intended design. It would be a small first step – a baby step really – toward beginning to get our fiscal house in order.
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For more information, please contact Matt Klucher, Assistant Director for Media Relations, at klucher@crfb.org.
