Due to the Tax Cuts and Jobs Act (TCJA) passed under the Trump administration, the current corporate tax rate is at 21%. However, if Biden gets its way, this rate will jump by 7%.
Per the Tax Foundation, a 28% corporate tax rate would destroy 159,000 U.S. jobs; a 7% increase from the current corporate tax rate would additionally cause American investment costs to increase while driving down economic creation and wages by 0.8% and 0.7%.
The Tax Foundation furthermore states that most of these devastating impacts would occur within ten years of the 28% corporate tax rate’s inception.
The danger of raising taxes on corporations
Democrats have long stated that increasing taxes on corporations will help the working class and fund social programs; however, William McBride of the Tax Foundation says otherwise.
According to McBride, increasing corporate taxes makes it harder for these businesses to (re)hire workers. Of course, getting Americans back to work after months of massive unemployment is critical for the betterment of the economy; however, a 28% corporate tax rate would increase costs for these establishments, hence impeding their abilities to (re)hire workers.