WASHINGTON, D.C. – Not only did the 2017 Trump tax cuts lower the tax burden on workers, families, farmers, and small businesses, it also simplified the U.S. tax code for millions of Americans, while sharpening America’s competitive advantage. If Congress allows the Trump tax cuts to expire, over 7 million taxpayers – especially small business owners – would be hurt by the return of the alternative minimum tax (AMT).

The AMT was originally created in an effort to tamp down on the ability of very wealthy individuals to use such large tax deductions and exemptions that they could pay nearly zero in taxes. However, over time, the reach of the AMT grew to impact millions of taxpayers – well beyond its original intent. This included many small businesses that file taxes under the individual tax brackets and found their tax burden rising and the complexity of their tax filing growing worse. 

Ways and Means Committee Chairman Jason Smith (MO-08) issued the following statement:

“Every household and every corner of the American economy benefited from the Trump tax cuts, which reformed the tax code and lowered taxes so that workers, families, farmers, and small businesses could focus on hiring workers, growing their businesses, and serving their communities. Crucial among that reform was reducing the burden placed on these job creators by the alternative minimum tax. Should Congress fail to extend the Trump tax cuts, over 7 million taxpayers will soon be subject to the AMT – a leap from the roughly 200,000 currently impacted by the policy. This would force families and small businesses to do their taxes twice in order to determine if they are liable for a higher tax burden. Right now, America’s job creators are planning for the future and making decisions today based on what sort of tax environment they might face in the future. Those decisions affect not just their bottom line but whether they can hire more workers and invest in growing their business and contributing even more to the economic health of their communities. That is why Congress has to act – and act swiftly – so small businesses are less burdened by uncertainty and are free to hire more workers, rather than just more accountants to help figure out their taxes.”

Key Facts:

• The 2017 Trump tax cuts increased the AMT exemption amount, blunting the impact of this complicated tax.
• Today, the AMT impacts 200,000 taxpayers. If the Trump tax cuts are allowed to expire, it would impact 7.3 million taxpayers. 

Key Policies from the Trump Tax Cuts Set to Expire if Congress Fails to Act:

• Congress only has 149 legislative days this year to act before the Trump tax cuts expire.
• The average taxpayer would see a 22 percent tax hike if the Trump tax cuts expire.
• A family of four making $80,610, the median income in the United States, would see a $1,695 tax increase if the Trump tax cuts expire.
  • This is worth about 9 weeks of groceries to a typical family of four across the country.
• 40 million families would see their household’s Child Tax Credit cut in half.
• 91 percent of all taxpayers would see their guaranteed deduction slashed in half. 
• 26 million small businesses would be hit with a 43.4 percent top tax rate if the Section 199A Small Business Deduction expires.
• 7 million taxpayers would be impacted by the return of the Alternative Minimum Tax.
• 2 million family-owned farms would have their Death Tax Exemption slashed in half next year.