WASHINGTON, D.C. – The RATE Coalition, whose members and affiliates employ more than 53 million American workers in all 50 states, released the following statement regarding the proposal to raise the corporate tax rate to a combined 31 percent:
“Any increase in America’s globally competitive corporate rate would position our country even further behind global competitors like China – and carry devastating consequences for American workers, who ultimately bear as much as 70 to 85 percent of the corporate income tax.
“The proposed 26.5 percent federal corporate tax rate requires context of the added combined state rate, which would push the proposed rate to 31 percent – 6 percent above China’s ceiling and a full 7.5 percent higher than the OECD average. Consequently, the proposal would lead to ‘massive job loss,’ lower wages, higher retail prices, negative effects on U.S. business investments, the return of inversions, and, per a recent Joint Committee on Taxation analysis, generally higher costs of living. Such troubling ramifications underscore why the OECD has long considered corporate taxes to be ‘the most harmful type of tax for economic growth.’
“As inflation fears mount and the economic recovery falters, the American people, who oppose tax hikes in the middle of a pandemic by an 80-20 margin, rightfully recognize that it isn’t merely the wrong time to raise taxes on job-creating businesses and the workers they employ – it’s the worst time.”
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BACKGROUND:
- Raising the corporate rate puts us further behind global competitors; when combined with state and local taxes, American corporations already pay a rate over 25 percent, higher than China
- The average corporate tax rate among OECD countries is 23.4 percent – and 25 percent in China, who also offers lower rates to hundreds of targeted growth industries where they want to expand their dominance in the global supply chain
- The current average corporate rate among American states is 4.8 percent. (25.8 percent when combined with the federal rate)
