This paper uses a difference in differences approach to estimate the effect of alternative minimum taxes (AMTs) on book income. Exploiting the 1986 introduction of the AMT book income adjustment (AMT BIA), I estimate that firms likely to face the AMT BIA decrease their book tax differences, corresponding to a short-run book income elasticity of 2.14 and a long-run book income elasticity similar to the short-run elasticity. I show these estimated behavioral responses are unlikely to be driven by mean reversion or confounding trends, and then use these estimates to develop a 10 year revenue score for Joe Biden’s proposal to implement a book income AMT. In my preferred simulation, the policy raises $316 billion in tax revenue over a decade. 72% of this revenue comes from firms in the utilities, manufacturing, finance and transportation sectors, and 29% of this revenue comes from the ten firms that face the largest tax increases. Benchmarking my revenue estimates against third party estimates from the
Biden campaign and tax policy think tanks, I find that to match the Biden campaign’s estimate I must assume close to zero behavioral responses to the policy, while to match the American Enterprise Institute estimate I must assume that firm responses to the policy are significantly larger than the responses I observe to the AMT BIA.