> In the first half of the 1980s, the Reagan administration instituted
> an array of new corporate loopholes, notably super-accelerated
> depreciation. The result was massive corporate tax avoidance.
You don't avoid taxes by depreciation; that's not how depreciation works. Depreciation is a way of changing the timeframe for taxation, not avoiding it. "Super-acceleration" (leading all the way to leasing -- a particular thorn in CTJ's side?) doesn't change the tax burden, it just changes the timeframe. The fact that things have to be depreciated at all is probably unfair taxation: leasing should prove that outright.
As a simple example, if something that was previously depreciated over five years is "super-depreciated" then you have to look at the tax burden for the full five years in both cases to understand whether any tax was "avoided" -- not just the period over which it was accelerated. The bottom line is that the spending of revenue in the course of business is always deductible, whether all at once (in the case of leasing) or over the depreciatable period.
Their framing of leasing and depreciation as Tax Evil is, as they say, "fuzzy math" ... they sort of go on to say that these deferrals add up over time, but fail to see that in order to accrue the credits, the companies involved have to actually have spent the money! This is only logical, because those payments increase someone else's tax burden; to disallow this primary function of a tax system would be to introduce "double" (technically: infinite) taxation.
There's no doubt in my mind that the corporate tax system needs quite a bit of work: mostly it shows a lack of leadership and how thoroughly corrupted the legislative branch in this country is. But I never understood AMT as anything but a cowardly sour-grapes approach to taxation: if you think corporations should pay more tax, raise the rates or get rid of deductions to change their behavior. Just jumping up and down and saying "but but but, you *have* to pay taxes" has done little more for revenue than a Tax Accountant Full Employment Act.
CTJ's claim seems to be that AMT was enacted in order to curb corporate appetite for deductions. I say that if you don't want them to get those deductions, take them away. Look at the large decrease in abuse of the entertainment deduction after it was phased out: you can change behavior with taxes.
And AMT for individuals? Don't get me started!
/jordan