S.796 - Book Minimum Tax Repeal Act (119th Congress)
Summary
The Book Minimum Tax Repeal Act (S.796) proposes to amend the Internal Revenue Code of 1986 by repealing the corporate alternative minimum tax (AMT). The bill aims to eliminate the AMT for corporations, modifying Section 55 of the tax code to apply the minimum tax only to non-corporate taxpayers. The Act would take effect for taxable years beginning after December 31, 2024.
Expected Effects
If enacted, the repeal of the corporate AMT would simplify the tax code for corporations. It would also potentially reduce the tax burden on large companies. This could lead to increased investment and economic activity.
Potential Benefits
- Simplified Tax Code: Reduces complexity for corporations by eliminating a parallel tax system.
- Potential for Increased Investment: Lower tax burden may free up capital for business investment and expansion.
- Enhanced Competitiveness: Could make US corporations more competitive globally by reducing their overall tax liability.
- Reduced Compliance Costs: Eliminating the AMT could lower compliance costs for businesses.
- Stimulated Economic Activity: Increased investment may lead to job creation and economic growth.
Most Benefited Areas:
Potential Disadvantages
- Potential Revenue Loss: Repealing the AMT could decrease government revenue, potentially increasing the national debt.
- Risk of Tax Avoidance: Without the AMT, some corporations might use deductions and credits to significantly reduce their tax liability.
- Perception of Unfairness: Critics may argue that repealing the AMT disproportionately benefits large corporations at the expense of individual taxpayers.
- Complexity Shift: While simplifying for corporations, the changes could introduce new complexities in other areas of the tax code.
- Uncertain Economic Impact: The actual economic benefits of the repeal are subject to debate and may not materialize as predicted.
Most Disadvantaged Areas:
Constitutional Alignment
The bill falls under the purview of Congress's power to lay and collect taxes, as outlined in Article I, Section 8, Clause 1 of the Constitution. The Constitution grants Congress broad authority over taxation, and the repeal of a specific tax like the corporate AMT is within this authority. However, the potential impact on revenue and the fairness of the tax system could raise concerns about whether the legislation promotes the general welfare, as stated in the Preamble.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).