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The Case for Repealing the Corporate Alternative Minimum Tax

Posted: 6 Jun 2003  

Terrence R. Chorvat

George Mason University School of Law

Michael S. Knoll

University of Pennsylvania Law School; University of Pennsylvania Wharton School -- Real Estate Department

Abstract

The article argues that the corporate alternative minimum tax ("AMT") should be repealed. The article notes that recent events involving Enron, Worldcom, Global Crossing, and Qwest have demonstrated that Congress' justification for enacting the corporate AMT in 1986 has been undercut because book income, like taxable income, can also be subject to wholesale manipulation. The article argues that the corporate AMT raises minimal revenue, distorts investment incentives, and imposes substantial compliance costs. In addition, the article argues that the corporate AMT does not increase efficiency or equity and does not prevent corporate tax shelters. In lieu of the corporate AMT, the article proposes reducing tax preferences and requiring greater public disclosure of the tax information of public companies.

Suggested Citation

Chorvat, Terrence R. and Knoll, Michael S., The Case for Repealing the Corporate Alternative Minimum Tax. Southern Methodist University Law Review, Vol. 56, p. 305, 2003. Available at SSRN: https://ssrn.com/abstract=414640

Terrence R. Chorvat (Contact Author)

George Mason University School of Law ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-8208 (Phone)

Michael S. Knoll

University of Pennsylvania Wharton School -- Real Estate Department ( email )

Philadelphia, PA 19104-6330
United States

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-898-6190 (Phone)
215-573-2025 (Fax)

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