Early Saturday morning Senate Republicans passed a major pro-growth tax reform bill. As U.S. Chamber President and CEO Tom Donohue said, “The decades-long drive toward meaningful tax reform is closer than ever to becoming a reality.”
The Senate’s package would lower rates for all businesses, shift the United States to a more globally competitive territorial tax system, and lower individual taxes, among other things.
Among those other things? A very unpleasant surprise in the form of the reinstatement of the corporate alternative minimum tax (AMT).
Repeal of the AMT has long been one of the policy pillars for pro-growth tax reform. It’s a step toward better tax policy because the AMT itself, like much of our current tax code, is an antiquated anachronism.
Retaining the AMT in reform is even more harmful than it is in its present form — among other things, it eviscerates the impact of certain pro-growth policies like the R&D tax credit and exacerbates the international anti-abuse rules. This cannot be the intended impact from a Congress who has worked for years to enact a more globally competitive tax code.
As we’ve said on more than one occasion, this is a once-in-a-generation opportunity to reform our outdated and anti-competitive tax code. The U.S. Chamber wants tax reform to be as pro-growth as possible, and that means repealing the AMT.
UPDATE: Caroline Harris talked with Bloomberg's David Westin and Shery Ahn about the tax plan.