The Trump administration is quietly waging an all-out regulatory war on a Biden-era corporate tax that aimed to prevent large companies from dodging their tax liabilities while reporting huge profits.
The corporate alternative minimum tax (CAMT) was enacted as part of the Inflation Reduction Act, Democratic legislation that former President Joe Biden signed into law in 2022. The CAMT requires highly profitable US corporations to pay a tax of at least 15% on their so-called book profits, the figures reported to shareholders.
As the Institute on Taxation and Economic Policy has explained: “Many of the special breaks that corporations use to avoid taxes work by allowing companies to report profits to the IRS that are much smaller than their book profits. Corporate leaders prefer to report low profits to the IRS (to reduce taxes) and high profits to the public (to attract investors).”
But since President Donald Trump took office in January, his administration has issued guidance and regulatory proposals designed to gut the CAMT. The effort is a boon to corporate giants and rich private equity investors at a time when the Trump administration is relentlessly attacking programs for low-income Americans, including Medicaid and nutrition assistance.
The New York Timesreported Saturday that “with its various tax relief provisions, the administration is now effectively adding hundreds of billions of dollars in new breaks for big businesses and investors” on top of the trillions of dollars in tax cuts included in the Trump-GOP budget law enacted over the summer.
“The Treasury is empowered to write rules to help the IRS carry out tax laws passed by Congress,” the newspaper added. “But the aggressive actions of the Trump administration raise questions about whether it is exceeding its legal authority.”
The administration’s assault on the CAMT has drawn scrutiny from members of Congress.
In a September 8 letter to US Treasury Secretary Scott Bessent, a group of Democratic lawmakers and Sen. Angus King (I-Maine) warned that the administration’s guidance notices “create new loopholes in the corporate alternative minimum tax for the largest and wealthiest corporations.”
“Most troubling, Notice 2025-27, issued this June, allows companies to avoid CAMT if their income—under a simplified accounting method—is below $800 million,” the lawmakers wrote. “The Biden administration previously set the safe harbor threshold precisely at $500 million in its proposed CAMT rule after calculating that a higher safe harbor threshold would risk exempting corporations that should be subject to CAMT under statute.”
“Now, less than nine months later and with zero justification, this new guidance summarily asserts that an $800 million safe harbor will not run that risk,” they continued. “We are seriously concerned that this cursory loosening of CAMT enforcement will simply allow more wealthy corporations to avoid paying their legally owed share.”
This story was published in partnership with Common Dreams. Read the original here.