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 on President Biden’s budget, which calls for raising the federal corporate rate from 21% to 28%. When combined with state taxes, American businesses would face an average effective tax rate of 33%. In comparison, competitors in China only pay 25%.
“We are deeply concerned to see the President’s budget calling for a substantial corporate tax hike. Any increase to our globally competitive corporate tax rate will pull our country further behind China and other nations, layering devastating consequences on the backs of American workers who will bear as much as 85% of an increase. Studies show the consequences of any rise in the corporate rate spread from ‘massive job loss,’ to higher retail prices and generally higher costs of living.
“Hard working American families have already borne the brunt of surging prices and record inflation. It would be irresponsible to add insult to injury by pushing costs higher with a policy the OECD considers ‘the most harmful type of tax for economic growth.’
“At a time when folks are grappling with record inflation, conflict in Europe and growing concern of recession, the last thing policymakers should do is raise taxes on American businesses and job creators.
“We strongly urge Washington leaders to refrain from damaging tax hikes, and instead give American businesses and innovators the runway they need to create jobs and drive economic growth.”
NOTE: The President’s recommendation to raise the corporate tax rate to 28% comes amid the worst inflation crisis in roughly 40 years.
- According to an estimate from the Congressional Budget Office, the federal government received $370 billion in corporate tax revenue during FY 2021. This figure represents an all-time high and 75% increase over the previous year.
- President Biden’s proposed 28% corporate tax rate is substantially higher than the worldwide average statutory corporate tax rate, which currently stands at 23.54 percent.