President Biden is at it again, proposing a corporate tax rate increase that would slow investment and economic growth, and hurt working families and U.S. companies. While he claims it would reduce deficits, it would just give Washington another trillion dollars to spend.Increasing the corporate tax rate to 28% would raise the U.S. rate to one of the highest in the world, harming our ability to compete. The President’s proposal would raise the actual combined U.S. rate to 32.8%, higher than any other OECD country but one.His proposal would increase the U.S. rate well above the average European tax rate of 21.3% and China’s top rate of 25%, putting US companies at a significant competitive disadvantage against our global competitors.It makes absolutely no sense for the U.S. to increase our corporate rate while virtually every country around the world is reducing their corporate rate. In recent years, most OECD countries have reduced their corporate rates, recognizing the damage high rates do to their economies and their ability to compete. Even the high-tax Scandinavian countries have reduced their rates to below the current US rate, and the UK Labour Party has pledged to reduce the UK rate if they take power. All these countries are reducing their rates because an overwhelming body of economic research shows that increasing the corporate tax rate is the most economically damaging tax increase. A high rate is harmful to economic growth and results in lower wages, higher prices, and fewer jobs.Study after study has shown that as much as 70% of the burden of a corporate rate increase falls on working families. A Federal Reserve Board study found that a corporate tax rate increase would be “uniformly harmful to workers.”Other studies have found that a corporate rate hike would have a “significant effect” on prices. One study found that nearly one-third of a corporate rate hike would fall on consumers.And while Biden rails against big corporations, studies have shown that millions of small businesses would be hit by a corporate rate increase. According to the NFIB, a corporate tax rate hike would be “a disaster for small businesses.”Finally, a corporate tax rate increase would raise taxes on millions of working families, violating the President’s promise not to raise taxes on anyone earning less than $400,000. A study by his own Treasury Department estimates that 35% of the corporate rate increase—-or more than $500 billion—-would fall on working families earning less than $297,095 a year.This corporate tax rate increase is a terrible idea, put forward by people who just do not understand the real world negative effect it would have on the U.S. economy, families, and companies. It is the last thing we should do if we want to avoid a recession, and it should be rejected out of hand.
President Biden Is At It Again With Calls for Corporate Tax Hikes
March 13, 2024
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