What you need to know
- The corporate tax hikes will be borne primarily by workers and retirees, argue Brady and Crapo.
- 1.4 million small business C-corps and the 98% of Americans making less than $ 500,000 would be affected by a corporate tax hike, Brady and Crapo said.
- The tax burden for the more than 98% of Americans who earn less than $ 500,000 a year will increase over time, JCT said.
The corporate tax increases proposed by President Joe Biden would disproportionately harm U.S. workers, retirees, and small businesses, including 1.4 million small business C-Corps and the 98% of Americans who make less than $ 500,000, according to one new study by the Joint Tax Committee.
House Ways and Means, Republican Chief, Rep. Kevin Brady, R-Texas, and Senate Finance Committee Senator Mike Crapo, R-Idaho, released the analysis Monday afternoon.
“This study supports what we have known for a long time – Corporate tax hikes are primarily borne by workers and retirees, and certainly the middle class / those making well below $ 400,000 a year, said Brady and Crapo, who commissioned JCT to conduct the investigation.
According to JCT research, as explained by Brady and Crapo:
- Within 10 years of increasing corporate tax from 21% to 25%, 3% of the corporate tax burden would be borne by low- and middle-income taxpayers with incomes well below $ 500,000.
- Of the more than 172 million taxpayers who would bear the burden of the increased corporate tax rate, 4%, or approximately 169 million, have an income below $ 500,000.
- A separate analysis shows that a corporation tax increase would affect 1.4 million small businesses organized as C-businesses.
Of the portion of U.S. corporate holdings (stocks, bonds, annuities, IRAs, and other retirement accounts) held by U.S. taxpayers, there are about eight million U.S. taxpayers who have some stake in U.S. corporations, Brady and Crapo said .
A recent report from the US Chamber of Commerce found that while the majority of the 30 million plus small businesses in the US are pass-through companies with tax obligations passed on to owners, 1.4 million of them are organized as C companies and thus are subject to corporation tax.