Republican leaders in the House and Senate released an analysis by the bipartisan Congressional Joint Committee on Taxation (JCT) on the potential impact of a proposal to increase the corporate tax rate.
“Our incidence assumption, which is consistent with much of the economics literature, is that in the very short term, in this case 2022, the incidence of corporate tax will be borne entirely by the capital owners. Only in the longer term does our incidence assumption allocate part of the corporate income tax burden to those taxpayers who, in addition to the owners of capital, also earn income from work, ”according to the JCT analysis.
U.S. Senate Finance Committee Ranking Member Senator Mike Crapo (R-ID and U.S. House Ways and Means Ranking Member Rep. Kevin Brady (R-TX) said a corporate tax rate increase would benefit U.S. workers, retirees, small ones Disproportionately harming businesses and Americans who earn less than $ 500,000.
“This study supports what we have known for a long time – corporate tax increases are borne primarily by workers and retirees, and certainly the middle class – by those who earn well below $ 400,000 a year,” responded Crapo and Brady to the analysis . “America’s health and economic recovery remain very fragile and could get worse before they improve. Unemployment is still too high and inflation is a real problem. Now is not the time to raise taxes on the very people we ask to lead us out of this crisis. ”
For 2022, a 25 percent increase in corporate tax revenue would increase U.S. taxpayers’ income by $ 27.7 billion, the Senators said, with about 57 percent of that additional income coming from taxpayers who are less than $ 500,000 a year to earn. Of the $ 40.4 billion increase in corporate taxes in 2031, 66 percent would be borne by taxpayers below $ 500,000, they added.