The Rise of the Minimum Tax

Document Type


Publication Date





CCH Incorporated




In January 1969, during the last few weeks of the Johnson Administration, Treasury Secretary Joseph Barr testified before the Congressional Joint Economic Committee that in 1967, 155 individuals had $200,000 or more of income but paid no Federal income taxes.5 In fact, twenty-one of them had income of more than $1 million and paid no Federal income taxes.6 It has been reported that Secretary Barr's testimony caused more letters of outrage from the American public to members of Congress in 1969 than the United States' involvement in the Vietnam War.7 Congress responded to Secretary Barr's testimony by enacting a minimum tax as part of the Tax Reform Act of 1969 ensuring that upper-income taxpayers pay at least some minimum amount of tax.8 Also, as part of the 1969 tax reform, Congress enacted a minimum tax on large corporations, which were called out by Senator William Proxmire and others for paying minimal to no taxes.9 The 1969 minimum tax for both individuals and corporations operated as an excise tax on tax preferences. [...]the minimum tax was often referred to as an on tax." According to the Obama Administration, such a minimum tax would encourage domestic investment and "not give companies an incentive to locate production overseas or engage in accounting games to shift profits abroad. [...]Republican policymakers would often point to House Ways and Means Committee Chairman Dave Camp's discussion draft of international taxation, released in October 2011, as creating the concept, but not the term, of a "minimum tax" on foreign earnings.17 As part of TCJA, Congress enacted a new U.S. international tax system, eliminating deferral for most foreign earnings of a foreign subsidiary of a U.S. multinational but taxing such earnings at a preferential tax rate.

This document is currently not available here.

Link to Publisher Site (BU Community Subscription)