“From now on, every multinational company should have to paya basic minimum tax. And every penny should go towards lowering taxes forcompanies that choose to stay here and hire here.” – President Obama’s 2012State of the Union
Sound familiar? That’s because individuals already have asimilar sounding plan in the Alternative Minimum Tax or AMT. The AMT was put inplace to ensure that the taxes of the highest-income taxpayers never fell belowa threshold level. Obama would use the term “fair.” At the time of its passagein 1969 it was aimed at 21 of the nation’s wealthiest individuals. Now it hitsmore than 4 million taxpayers each year.
The problem is that Congress failed to tie the AMT toinflation, meaning that every year Congress must enact a “patch” lest manymiddle-income families be faced with higher taxes. If that sounds like adebacle that’s because it is. Which makes President Obama’s call for a similarscheme on the corporate side of the code seem all the more ludicrous. We needto be simplifying not complicating. Apparently President Obama has never takena look at our annual tax complexity study, which can be found HERE.