President Biden‘s proposal to raise the corporate tax rate to 28% would shrink the U.S. economy and eliminate more than 138,000 jobs over the next decade, according to an analysis by the nonpartisan Tax Foundation.
In addition to the job losses, the study from 2021 found that the impact of increasing the corporate tax rate from 21% to 28% would cause the nation’s gross domestic product to contract by $720 billion over the next decade.
“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,” Sen. Marsha Blackburn, Tennessee Republican, said. “American jobs should stay here.”
Mr. Biden revived his push to hike the corporate tax rate this week when releasing the administration’s $6.8 trillion budget. The blueprint proposes to raise taxes by more than $5.5 trillion, while boosting domestic and defense spending.
“No billionaire should be paying a lower tax than someone working as a schoolteacher or firefighter,” Mr. Biden said Thursday in Philadelphia as he announced the spending plan. “My plan is to make sure corporations pay their fair share.”
The higher corporate tax rate would also result in cutting 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 an average cut of $1,120. But Mr. Biden‘s tax increase would negatively affect middle- and upper-class families the most. 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.
The Tax Foundation‘s study was published in 2021 when Mr. Biden first made a push to raise the corporate tax rate. Since then, the White House has revived the proposal multiple times, but has failed to secure congressional approval given GOP opposition in the House and Senate.
“President Biden‘s ‘budget’ is dead on arrival,” Sen. Mike Braun, Indiana Republican, said. “It’s a campaign wishlist of tax hikes and fuzzy math that would do nothing to help Hoosiers struggling with Biden‘s inflation crisis.”