President Biden’s proposal to hike the corporate tax rate to 28% will shrink the U.S. economy and decimate more than 138,000 jobs over the next decade, found an analysis by the nonpartisan Tax Foundation.
The study found that if Mr. Biden’s proposal was adopted, the nation’s gross domestic product will shrink by $720 billion over the next decade. In more concrete terms, the impact would mean a loss of more than 138,000 American jobs.
Critics of the tax hike say the study’s findings are not surprising.
“With a corporate tax rate of 28%, Biden will drag the U.S. back to a time when businesses sent jobs overseas to countries with friendlier rates,” said Sen. Marsha Blackburn, Tennessee Republican. “American jobs should stay here.”
Mr. Biden and his Democratic allies in Congress said the hike is needed to ensure corporations pay their “fair share,” especially after former President Donald Trump cut taxes across the board in 2017.
“The Trump tax cuts added $2 trillion in deficit spending and largely helped the rich and the largest corporations,” Mr. Biden said. “My budget raises the corporate tax rate to 28 percent, far lower than the rate it was between World War Two and 2017 when it was lowered.”
The higher corporate tax hike would also cut wages and income across the board for American workers, according to the Tax Foundation.
The study estimated that workers making less than $19,500 per year would see their after-tax income drop by $550. Those making between $19,500 and $33,100 would see a $1,120 cut.
Mr. Biden’s tax hike would negatively impact middle and upper-class families the most, however.
Taxpayers making between $33,100 and $50,229 would have their post-tax income shrink by more than $2,000. Meanwhile, individuals making between $50,229 and $80,150 would see a drop of $3,340.
Those making above $80,150 would see their post-tax income cut by more than $16,400.
“Inflation is at its highest rate in 40 years. Gas prices are, on average, the highest we’ve ever seen,” said Rep. Mike Bost, Illinois Republican. “And what does President Biden want to do next? Hike taxes at the highest rate in U.S. history.”
The corporate tax hike is only one of only 36 tax increases the White House has proposed in Mr. Biden’s $5.8 trillion budget for this year.