Republican lawmakers released an analysis Monday showing that even a small increase in corporate tax would have a negative impact on middle-class Americans and small businesses.
The study was published by Sen. Mike Crapo, R-Idaho, and Rep. Kevin Brady, R-Texas and conducted by the Joint Committee on Taxation.
The JCT analyzed the economic impact of increasing the corporate tax rate to 24%, 25% and 28%. The corporate tax rate was reduced from 35% to 21% by the Tax Cuts and Jobs Act 2017.
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The study found that over 10 years, who would bear the burden of increasing the tax rate to 25%, would have incomes less than $ 500,000.
Approximately 169 million of the 172 million – or 98% – taxpayers who would be affected by this slight increase have incomes less than $ 500,000.
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A rise in the corporate tax rate to 25% would raise an estimated $ 27.7 billion from taxpayers in 2022 alone.
“This study supports what we have long known – corporate tax hikes are primarily driven by workers and retirees, and certainly the middle class / those making well below $ 400,000 a year,” Crapo and Brady said in a statement . “Now is not the time to raise taxes on the very people we ask to lead us out of this crisis.”
Brady and Crapo added that a separate study showed that a corporate tax increase would hit 1.4 million small businesses organized as C-companies.
They also said corporate tax increases would hurt retirees as 107.8 million taxpayers hold some stake in U.S. corporations through pensions, IRAs, and other retirement accounts.
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President Biden has proposed raising the corporate tax rate to 28%, which is lower than what it was before the President Trump administration lowered it to 21%.
The proposal is part of several tax increases the government proposed to pay for various packages of expenses.
The government has repeatedly stated that it will not increase tax rates for those earning less than $ 400,000.