The Trump administration is undertaking significant changes to corporate tax regulations, specifically targeting the corporate alternative minimum tax (CAMT) introduced during the Biden administration. This tax, part of the Inflation Reduction Act signed into law in 2022, mandates that highly profitable U.S. corporations pay a minimum tax rate of 15% on their book profits, which are the figures reported to shareholders.
The CAMT aims to close loopholes that allow corporations to minimize their tax liabilities while still reporting substantial profits. According to the Institute on Taxation and Economic Policy, many companies exploit various tax breaks to declare much lower profits to the IRS than what they report publicly. This dual reporting allows corporations to lower their tax burdens while still appealing to investors with high profit figures.
Since assuming office, President Donald Trump and his administration have introduced regulatory proposals that could effectively weaken the CAMT. Recent reports from the New York Times indicate that the administration’s actions could add “hundreds of billions of dollars in new breaks for big businesses and investors,” compounding the tax cuts already enacted earlier this summer.
Congressional Concerns Over New Tax Guidance
The administration’s approach has not gone unnoticed by lawmakers. On September 8, a group of Democratic representatives and Senator Angus King (I-Maine) sent a letter to U.S. Treasury Secretary Scott Bessent, expressing their concerns over new guidance that appears to create loopholes within the CAMT framework. They highlighted that Notice 2025-27, issued in June, allows companies with income below $800 million to avoid the CAMT under a simplified accounting method.
The lawmakers criticized the administration for raising the safe harbor threshold from the original $500 million proposed by the Biden administration. They warned that this significant increase would exempt many corporations that should be liable for the CAMT, potentially diminishing tax revenues that support public programs.
“Our serious concern is that this cursory loosening of CAMT enforcement will simply allow more wealthy corporations to avoid paying their legally owed share,” the letter stated.
The Treasury Department has been granted authority to draft rules that help the IRS enforce tax laws passed by Congress. Yet, the aggressive measures taken by the Trump administration have raised questions about the extent of its legal authority in altering established tax regulations.
As the administration continues its push for tax breaks favoring corporations and wealthy investors, it also faces criticism for cutting crucial support programs for low-income Americans. This juxtaposition raises broader questions about fiscal responsibility and the administration’s priorities in addressing economic disparities.
The ongoing developments in corporate tax regulation and their potential effects will be closely monitored by both lawmakers and economic analysts in the coming months.
