Cracking the Code: Making Sense of the Corporate Alternative Minimum TaxBrookings Institution Press, 2010 M12 1 - 168 pages 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. |
Contents
V | 15 |
VI | 16 |
VII | 20 |
VIII | 23 |
IX | 26 |
X | 28 |
XI | 31 |
XII | 40 |
XXVII | 81 |
XXVIII | 84 |
XXIX | 89 |
XXX | 93 |
XXXI | 95 |
XXXII | 98 |
XXXIII | 103 |
XXXIV | 108 |
Other editions - View all
Cracking the Code: Making Sense of the Corporate Alternative Minimum Tax Andrew Lyon Limited preview - 2010 |
Cracking the Code: Making Sense of the Corporate Alternative Minimum Tax Andrew Lyon Limited preview - 2010 |
Cracking the Code: Making Sense of the Corporate Alternative Minimum Tax Andrew B. Lyon No preview available - 1997 |
Common terms and phrases
accelerated depreciation additional adjusted current earnings adjustments and preferences Alternative Minimum Tax alternative minimum taxable amortization AMT and loss AMT credits AMT depreciation AMT firms AMT liability AMT or loss AMT status benefit calculated chapter compliance costs COMPUSTAT corporate assets Corporate Tax Return cost of capital current earnings adjustment debt finance depreciation adjustment depreciation deductions economic income effective tax rates efficiency firm's firms permanently foreign tax credits Glenn Hubbard Income Corporate Tax increase industry intangible capital Internal Revenue Service investment incentives investment tax credit justment loss firms loss position loss status ment operating losses pay AMT period pretax return reduce regular tax firms regular tax liability regular tax system result shareholders Statistics of Income tax advantages tax incentives tax loss tax payments tax planning tax preferences tax provisions Tax Reform Act Tax Return Files tax status tax treatment tax-preferred activity taxable income taxation taxpayers tentative minimum tax
Popular passages
Page v - ... of such studies. It is not a part of their function to determine, control, or influence the conduct of particular investigations or the conclusions reached.