Delancey Strategies President Jared Levy and The Selfie Vote Writer Kristen Soltis Anderson burden President Biden’s proposed economic aid plan.
During the campaign, President Biden pledged to raise the corporate tax rate – an increase that could adversely affect the US economy, according to a report released Wednesday morning.
New findings from the Tax Foundation show that increasing the corporate tax rate from 21% to 28% would cut GDP, the broadest measure of goods and services produced in the country, by 0.8% and cut 159,000 jobs. It would also cut workers’ wages by 0.7%, the bipartisan organization said.
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By increasing the tax rate paid by companies to 28%, Biden would bring the state’s combined tax rate to around 32%, the highest statutory tax rate in the 37-member organization for economic cooperation and development, according to the tax foundation. “Impact on US economic competitiveness and increase investment costs in America.”
Biden repeatedly pledged to repeal former President Donald Trump’s 2017 tax cuts and jobs bill that cut the corporate tax rate from 35% to 21% during his presidential campaign.
He also promised to implement a number of other tax hikes for wealthy Americans, including restoring the highest individual tax rate from 37% to 39.6%, taxing capital gains as ordinary income, capping deductions for high earners, and introducing the social wage tax Security on wages over $ 400,000 to fund his multi-billion dollar agenda.
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Top American banks could also see their tax burdens spike if Biden and Congressional Democrats raise interest rates. An analysis published by Bloomberg in January found that the country’s six largest banks – JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley – could owe up to $ 11 billion more in taxes if Biden Enterprise rate increases from 21% to 28%.
This would follow on from $ 42 billion in savings by the same banks that increased their profits by more than 10% in the past three years after Trump’s 2017 Tax Cuts and Jobs Act cut the company’s rate from 35% to 21%. could increase.
Biden has stated that he won’t raise corporate taxes until at least 2022 when the U.S. economy recovers from the coronavirus pandemic that sparked the worst downturn since the Great Depression.
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The corporate tax hike would generate around $ 740 billion in new revenue over the next decade, according to a recent analysis by the Tax Policy Center.
Still, the Constitution gives Congress the power to set tax policy, and given the smallest possible majority Democrats have in the Senate, centrist lawmakers will be the ones who have the leverage to dictate what happens.