2020 Democrats set sights on corporate tax hike
October 27, 2019
Interest is growing among 2020 Democrats in raising the corporate tax rate back to the level where it was prior to President Trump’s tax-cut law.
Trump’s 2017 tax-cut law cut the corporate tax rate from 35 percent to 21 percent. While no Democrats voted for Trump’s law, a number agreed with Republicans that the 35 percent rate was too high.
But in recent weeks, some Democratic candidates across the ideological spectrum have suggested that the rate should once again be 35 percent.
Many economists and policymakers across the ideological spectrum had thought that the U.S. corporate tax rate was too high when it was at 35 percent, because that rate was among the highest in the world.
“I think most economists would agree that raising the U.S. corporate tax rate back to 35 percent is not a good idea,” said Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, which is led by a former Obama administration tax official. “When the U.S. rate is so far out of whack with the rest of the world, all you’re going to get is opportunities for avoidance and evasion.”
During his presidency, Obama proposed cutting the corporate tax rate to 28 percent while also curbing business tax breaks and establishing a minimum tax on U.S. companies’ foreign earnings.
Conservative organizations and business groups have been warning against raising the corporate tax rate.
“Proposals to raise taxes carry harmful consequences for all Americans,” the RATE Coalition — a pro-corporate tax cut group of businesses that includes AT&T, Ford and The Home Depot — said in a statement.
“Tax hikes on American workers and job creators would crush our booming economy, increase unemployment, and reverse wage growth,” the coalition added. “A globally uncompetitive tax rate would move America backward.”
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