What question did this study set out to answer?

The aim is to analyze the equity effects of minimum tax provisions in U.S. tax legislation.

March 18, 2026

A Horizontal Equity Analysis of the Minimum Tax Provisions: An Empirical Study.

Puntos clave

The aim is to analyze the equity effects of minimum tax provisions in U.S. tax legislation.
Evaluated minimum tax provisions from TRA76, RA78, and TEFRA
Used taxpayer data from the 1978 Individual Tax Model by IRS
Classified taxpayers into groups based on expanded income
Computed the coefficient of variation for each group
Compared the relative equity effects of the three minimum tax structures
TRA76 add-on minimum tax was found to enhance horizontal equity significantly
Comparison of minimum tax structures revealed varying impacts on equity
The analysis highlighted the importance of income classification for fairness assessments

Resumen

Abstract ABSTRACT: Congress introduced the first version of the minimum tax provisions in the Tax Reform Act of 1969. Congress subsequently modified the minimum tax provisions with the Tax Reform Act of 1976 (TRA76), the Revenue Act of 1978 (RA78), and the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA). This study evaluates the TRA76, RA78, and TEFRA minimum tax provisions from the perspective of horizontal equity. The study is based on taxpayer data from the 1978 Individual Tax Model prepared by the Internal Revenue Service (IRS). Relevant individuals are classified into groups of equally-situated taxpayers based on expanded income. For each such group, the coefficient of variation (CV) is computed, and the three minimum tax structures are compared for their relative equity effects. The study generally concludes that the TRA76 add-on minimum tax best enhances horizontal equity.

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