Next Step in Major Corporate Tax Reform from Inflation Reduction Act

The U.S. Department of the Treasury and Internal Revenue Service issued a Notice of Proposed Rulemaking today to implement the Inflation Reduction Act’s Corporate Alternative Minimum Tax (CAMT). Per the Treasury, the CAMT only applies to large corporations that average more than $1 billion in profit per year. In addition, if these corporations pay regular taxes that equal or exceed 15% of their adjusted profits, they would pay no additional tax. Americans for Tax Fairness (ATF) released the following statement:

“The Corporate Alternative Minimum Tax is a vital policy to ensure that corporations pay their fair share. It continues the important work that the Biden-Harris administration has undertaken to create a fairer tax code that ensures corporations fulfill their obligations to our country the same way everyday Americans do,” said David Kass, ATF’s executive director. “For decades, the largest corporations have been working diligently toward a shared goal: to reduce or even eliminate their tax obligations despite increasing profits every year. We must continue to implement policies that hold them accountable. Using extensive loopholes to dodge taxes gives massive corporations unfair advantages against small businesses, and leaves the rest of us to pick up the bill. Wealthy corporations should not be paying lower rates of federal taxes than teachers, nurses, and firefighters.”

This proposal for the CAMT comes on the heels of years of increased tax avoidance by major corporations. In 2023, five of the largest American firms – General Electric, General Motors, Meta (owner of Facebook), Tesla and T-Mobile—paid little in federal income taxes and in some cases even got big refunds. This past year, ATF released reports that revealed not only are  American corporations paying lower and lower tax rates, but they’ve also raised prices on consumers and used large parts of their profits to boost the pay of top executives and enrich wealthy stockholders with big shareholder payouts. In the first five years of the Trump-GOP tax law, which cut the corporate tax rate by two-fifths, 23 corporations paid zero federal income tax despite being profitable every year. In 2023, the richest 100 companies had immense profits—over $1 trillion— and saw their market value increase by 31%; while they simultaneously slashed a total of 55,000 jobs while raising their average median wage by a meager 6.5% (barely staying ahead of last year’s 4.1% inflation rate).