The New CAMT Does Not Meaningfully Alter Corporate Tax Outcomes

Congress enacted the new corporate alternative minimum tax in 2022 as part of the Inflation Reduction Act. Aside from its political aims, CAMT’s primary policy objectives were to mitigate aggressive corporate tax planning and ensure that large, profitable corporations contribute a substantial amount of income tax.

Proponents argued that by linking a minimum tax to financial statement income, CAMT would reduce tax avoidance opportunities, generate significant revenue to offset tax subsidies in the act, and substantially change the distribution of the corporate tax burden. This article, the second of two on CAMT, presents a preliminary evaluation of these objectives, drawing on survey results from members of the Tax Executives Institute, or TEI. Our analysis examines CAMT’s impact on corporate tax planning and estimated tax revenue, demonstrating that despite imposing substantial new compliance and planning costs, CAMT appears to have done little to change who pays corporate income tax or how much they pay.

The first article established that the new CAMT imposes significant compliance costs on affected corporations. And although any tax law comes with compliance costs, the costs should be weighed against outcomes. Our results indicate that not only does CAMT impose substantial compliance burdens, but it also fails to meet its projected revenue and behavioral goals, and appears to operate primarily as an additional compliance regime.

Our analysis reveals three key findings.

• CAMT has not reduced tax planning. More than 80% of survey respondents indicate that CAMT either had no effect on tax planning strategies or actually intensified them.
• Respondents generally believe initial estimates of both the number of companies affected and the projected revenue generated are inflated. Those who perceive that more companies are affected than initially projected primarily cite unforeseen interactions with the One Big Beautiful Bill Act.
• CAMT has not meaningfully altered key aggregate outcomes that motivated its enactment. Public filings indicate largely unchanged effective tax rates for large corporations and the number of profitable firms reporting little or no current income tax liability.

Survey

TEI sent the survey to select TEI members, chosen based on having an interest in CAMT as a policy issue, or suspected CAMT liability. TEI’s membership consists primarily of tax directors, vice presidents of tax, and similar roles at large and mid-sized companies across a wide range of industries.

These professionals are responsible for implementing CAMT calculations, developing internal compliance and planning models, and signing off on returns. We received responses from 64 individuals, 60 of which completed it entirely, 23.4% of whom work for companies that have paid CAMT.

The questionnaire was delivered through Qualtrics and was designed to be fully anonymous. Participants were told the survey wouldn’t collect any identifying data, including IP addresses, and that results would be only reported in aggregated form.

Tax Planning and Revenue

Tax planning costs are difficult to empirically measure, especially in response to any specific tax law. Our survey shows that in-house tax professionals didn’t change the level of tax planning their company undertakes to comply with the passage of the new CAMT; Congress’ stated goal of meaningfully reducing tax planning appears not to have been achieved.

As shown in Figure 1, below, a substantial majority of companies report no change in their planning (60%), and a small minority report a reduction (13.4%). More companies indicate that tax planning increased rather than decreased (23.3% versus 13.4%).

Figure 1: Did/will the CAMT change the tax planning your company undertakes?

Tax executives’ insights on the revenue estimates from CAMT are particularly important because current data on the revenue being raised is very limited. Conceptual issues and compliance costs might be tolerable if CAMT were raising large amounts of revenue in a reasonably efficient way.

Although public filings provide a very incomplete picture, CAMT is likely raising little revenue compared with its associated compliance costs. An examination of CAMT-related disclosures in 2024 Form 10-K filings identified 694 CAMT-related passages from 401 unique public companies. Ethington, M., Hoopes, J. L., & Thornock, J., The corporate AMT raises little revenue: Rescore and repeal it, Tax Notes (2025, May 21).

Only 15 public companies reported paying CAMT, and just five of those paid a total of $572 million in CAMT. The Joint Committee on Taxation, in contrast, expected CAMT to generate over $34 billion in 2024 and roughly $222 billion over the first 10 years. Joint Committee on Taxation (2022).

Survey evidence from in-house tax professionals may complement and corroborate the evidence from 10-Ks. These individuals are well positioned to assess the issue: they are responsible for remitting the tax and are in frequent communication with peers, giving them insight into how CAMT is affecting other firms.

They also represent both private and public firms. We asked respondents whether they view the original Joint Committee on Taxation revenue estimates for CAMT as much too low, slightly too low, about right, slightly too high, or much too high. Figure 2 below presents the results.

Figure 2: The original revenue estimate for the CAMT assumed that around 100 companies would end up paying CAMT, and it would generate over 10 years about $222 billion in revenue. Based on your own experience, conversations with peers, etc., do you believe those initial estimates are too low or too high?

A majority (53.4%) of respondents reported that JCT’s estimates are either “slightly too high” or “much too high.” Still, 38.3% of respondents believe the estimates are too low. In a free-response question, we asked respondents to elaborate on their answers, which offers several insights into the drivers of these differing assessments.

First, it appears that many of those who thought the estimates were “much too low” or “slightly too low” were referring to the number of companies that would end up paying CAMT, and not the revenue generated. Of the 17 comments we received, five mention more companies paying CAMT than expected and zero mention CAMT raising more revenue than expected. Some comments specifically highlight the imbalance. For example, one participant wrote, “I think there will be many more companies that will have to deal with this than originally thought, but I think the dollars raised will not be anywhere near as high as they thought.”

A consistent theme among the comments is CAMT’s complexity for a large number of companies where little or no revenue is raised. One executive wrote, “There seem to be a lot of companies that are applicable corporations that must comply with the CAMT filings, but very few companies actually pay CAMT. The companies that seem to be caught paying CAMT are not the large companies congress appeared to be going after, but have increased compliance costs and complexity tremendously.” Another stated, “While a small number of companies may end up paying CAMT, thousands of companies are subject to filing Form 4626 because the threshold to file the form is so much lower than the threshold to be subject to the tax.”

Second, it appears that unintended interactions between the new CAMT and the One Big Beautiful Bill Act are another driver for the “loo low” responses. Of the seven free response comments from participants who said the estimates were too low, three mention the One Big Beautiful Bill Act. One respondent stated, “CAMT by itself is not awful, but CAMT together with the OBBBA is a nightmare. It’s capturing companies that it was never intended to capture.” Several comments by other participants, including among executives who said the estimates were too high, echo the sentiment that the types of companies paying CAMT are not the large, public companies that were originally targeted.

Third, consistent with the results in Figure 1 above, some executives report that fewer companies are subject to CAMT than expected because they can plan around it. One simply stated, “Many companies are engaging in planning to not fall under CAMT. I believe the tax revenue is grossly overstated.”

Overall, these comments reflect a common perception that the policy imposes widespread compliance costs but produces far less revenue than originally projected.

Effective Tax Rate Trends

We examine overall trends in effective tax rates and the incidence of profitable companies paying no taxes among the profile of companies targeted by CAMT. These are coarse estimates based on publicly available data, but they help corroborate the survey evidence suggesting that CAMT has little effect on corporate tax planning and raises less revenue than expected.

We pull data from Compustat for US corporations that average at least $1 billion in pre-tax income from 2020-2024. This requirement is meant to isolate corporations subject to CAMT, which is those with a three-year rolling average of adjusted financial statement income more than $1 billion. We remove noncorporate entities (REITs, LPs, LLPs, LLCs, trusts) and calculate average GAAP ETRs (total GAAP tax expense divided by pre-tax income) and cash ETRs (total cash taxes paid divided by pre-tax income). To make sure the ETRs are interpretable, we constrain them between 0% and 100%, as is common in the tax avoidance literature. That is, when a company’s ETR is negative, we reset it to 0%; when a company’s ETR is above 100%, we reset it to 100%. Then we compute the sample average for each year. (We find similar results if we do not reset values below 0% and above 100%.)

Figure 3. Cash and GAAP ETRs before and after CAMT enactment

The survey reveals no major changes in effective tax rate trends. See Figure 3. The dashed vertical line marks when the new CAMT became effective (fiscal years beginning after Dec. 31, 2022). In the years leading up to enactment (2020–2022), average cash ETR and average GAAP ETR closely correlate and average between 18% to 20%.

After the effective date, cash ETR rises to 22% in 2023 and remains there in 2024, while GAAP ETR drops in 2023 and then partially rebounds in 2024. Descriptively, the pattern suggests that cash taxes paid increased slightly in the post-enactment period, whereas book tax expense (GAAP ETR) did not rise in the same way.

Next we consider the same sample but graph the number of corporations that have zero or negative tax expense before and after CAMT. Firms that pay nothing in taxes were a special motiving target for the CAMT, with President Joe Biden calling attention to them in the State of the Union address both the year before and the year after CAMT passage.

Figure 4. Number of companies with zero or negative tax expense before and after CAMT enactment

Figure 4 plots, by year, the number of firms in our sample reporting zero or negative GAAP tax expense (blue) and zero or negative cash taxes paid (orange), with the dashed vertical line marking CAMT enactment. Before the effective date, the number of firms with zero/negative GAAP tax expense is very high in 2020, drops sharply in 2021, and then rises again by 2022, while the number of zero/negative cash taxes paid stays in a narrower range in the low-to-mid 20s.

After enactment, the cash-tax series is flat (22 companies from 2022-2024), while the GAAP-tax-expense series rises slightly in 2023 and then falls in 2024. Overall, the figure suggests no obvious post-enactment decline in the number of firms reporting zero or negative tax outcomes in this sample, especially for cash taxes. However, we caveat that these patterns are descriptive and could reflect year-to-year noise and accounting timing effects rather than a clean causal CAMT effect.

Takeaways

The high compliance costs demonstrated in the first article, along with the findings in this article indicate an uncomfortable conclusion: CAMT appears to function less like an effective minimum tax and more like a parallel compliance regime layered on top of the existing corporate tax system, including compliance costs without concomitant revenues. Firms that are unlikely to owe the tax still face substantial costs to run tests, compute adjustments, and manage uncertainty.

CAMT’s complexity leads to unavoidable interactions between CAMT and other provisions, such as with the One Big Beautiful Bill Act. These interactions appear to be a major driver of compliance and surprise exposure—and they should be expected with any future tax legislation. If the policy goal is to raise reliable revenue from a clearly defined set of large firms while reducing avoidance incentives, the law is failing.

Our analysis is intentionally preliminary and descriptive. CAMT is new, guidance is evolving (because the law is so complex), and firm behavior will continue to adapt. But the findings from the practitioners charged with implementing the law is clear: The burden is immediate, the uncertainty is high, and the perceived behavioral and revenue gains are modest. That gap—between administrative cost and policy payoff—should be the central focus of the next round of CAMT evaluation.

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

Andrew Belnap is an assistant professor of accounting at University of Texas at Austin. Jeffrey L. Hoopes is a professor of accounting at University of North Carolina at Chapel Hill. They are both members of the Tax Policy Network.

Although TEI members participated in the survey, none of the authors’ statements or survey results mentioned in this article represent an official position of TEI. Given the sensitive nature of CAMT and tax information, we did not include any identifying details in our survey, so respondents could be ensured anonymity. The survey, administered via Qualtrics, ensured complete anonymity, such that (1) respondents were informed that no identifying information, including IP addresses, was collected; (2) responses would be used only in aggregate form; and (3) any quoted open-ended comments in publications would not be linked to other answers or identifying information. We thank TEI for their help in distributing this survey.

The authors have no financial or other conflicts of interest to disclose. The authors appreciate the support of the Tax Policy Network.

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