The combined state and federal corporate tax rate in Arizona would hit 31.5 percent according to President Biden’s infrastructure plan, which is the 39th highest tax among the 50 states, according to a new study by the Tax Foundation.
U.S. corporations currently pay a corporate tax rate of 21 percent to the federal government, the Tax Foundation reported, but they also pay additional corporate taxes in 44 states and Washington, DC.The combined average paid by corporations is 25.8 percent, according to the Study.
Companies based in six states – Ohio, Nevada, South Dakota, Texas, Washington, and Wyoming – don’t pay state income tax, although they must pay their stake to the federal government, the Tax Foundation said.
Biden’s proposal would set the US combined corporate tax rate at 32.4 percent, which would be the highest rate under the Organization for Economic Co-operation and Development (OECD). The group includes nations in North America and Europe as well as Australia and New Zealand.
Such an increase in the US corporate tax rate would encourage companies to leave the US and cut workers’ wages and economic production, the Tax Foundation said.
However, U.S. companies have the option to deduct state-paid corporate taxes, which lowers their state corporate tax rate, the study found.
Combined corporate income tax under the Biden Plan
|Status||Combined state, national corporate tax rate under the Biden Plan||Rank (from highest to lowest)|
|New Hampshire||33.5%||15 (tie)|
|new York||32.7%||22 (tie)|
|West Virginia||32.3%||27 (tie)|
|South carolina||31.6%||35 (tie)|
|South Dakota||28.0%||45 (tie)|
Source: Tax Foundation