Trump Meta Tax Giveaway $16 Billion Less Thanks to Biden-Era Law

The tech giant Meta Platforms Inc. made news this week with its announcement that the company’s quarterly income was reduced by a whopping $16 billion due to income taxes.

A number of media outlets reported the news in a way that at least implied the recently-enacted Trump tax cuts are responsible for Meta’s income tax hit. But Meta’s earnings setback is entirely attributable to an important tax reform championed by the Biden administration in 2022.

This summer’s massive tax package gave corporations virtually everything they wanted—it permanently extended bonus depreciation, allowed immediate expensing of research and development spending, loosened limits on interest deductions, created lavish new subsidies for fossil fuel companies, and preserves the 21% statutory tax rate.

So it’s not surprising that Meta sees nothing but flowers in its tax forecast as a result of the new law, saying it expects “a significant reduction in our US federal cash tax payments for the remainder of 2025 and future years” due to the Republican tax package.

But there’s a fly in Mark Zuckerberg’s ointment: The Biden-era corporate alternative minimum tax, or CAMT, is set to give a $16 billion haircut to Meta’s tax-cut haul.

Enacted three years ago in response to revelations that profitable companies could leverage a variety of tax breaks to avoid paying any federal income tax, the CAMT acts as a backstop to the regular income tax. Rather than directly repealing the array of specific tax breaks used by tax avoiders, the CAMT puts a cap on the aggregate amount of tax breaks companies can claim, ensuring that tax breaks can’t reduce the effective tax rate of large companies below 15% of their adjusted financial statement income.

The tax indirectly limits the benefits companies can receive from some of the tax breaks that were greatly expanded by the Trump tax law, most notably research and development expensing and interest deductions. This means that for companies that (like Meta) routinely generate more tax breaks than they can use in a year, the CAMT creates a real possibility that they won’t be able to cash in on these unused tax breaks in future years.

That appears to be what Meta’s tax team is acknowledging in this week’s report: Meta’s earnings release confirms that Meta’s tax hit “reflect[s] the impact of the US Corporate Alternative Minimum Tax.”

The CAMT appears, in this case, to be making Trump’s latest budget-busting tax cut at least slightly less costly. Small wonder that the Trump administration has shown resistance toward the CAMT. As the Tax Law Center has documented, Trump’s Treasury Department has issued multiple rounds of regulations weakening the reach of the tax since the beginning of 2025, each of which appears to be designed to reduce the effectiveness of Biden’s corporate tax backstop.

Republicans in Congress are doing their part to weaken the minimum tax as well; their tax law specifically exempts certain categories of oil and gas company income from the CAMT, ensuring one of the lowest-taxed industries in the US will remain so going forward.

In the three months since the passage of Trump’s latest tax cut, dozens of companies have forecast tax savings in the billions from the new law. The Congressional Budget Office has concluded that the new tax law is mainly responsible for a 15% drop in corporate tax collections over the past year.

But Meta’s recent earnings report is an important reminder that despite the Trump administration’s efforts, important reforms put in place by the Biden administration are preventing the worst abuses of our corporate tax laws.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Matt Gardner is a senior fellow at the Institute on Taxation and Economic Policy.

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