The Current Events Room
As of now it doesn't look like it will pass, which is good. Should it expect more economic disruption in a very weak economy.
A Corporate Tax Hike Would Only Compound Covid's Wreckage
Read the rest of the article at the link.Washington’s movement away from an increase in our country’s corporate tax rate is a welcome development for struggling employers of all sizes across America – particularly the 1.4 million small businesses that faced the prospect of paying a higher rate. Amid rightful concerns about what such a proposal would mean for businesses’ ability to bounce back, any funding mechanisms for important priorities included in the Build Back Better plan must reflect the reality that a higher corporate rate would be the wrong approach at the worst time.
Indeed, the consequences of a corporate rate hike – which, per a slew of analyses on the subject, include ‘massive job loss,’ lower wages, higher retail prices, negative effects on U.S. business investments, and the return of inversions – would only compound COVID’s economic wreckage, mounting inflationary pressures, and supply chain disruptions. In my home state of Arkansas, for instance, a higher corporate rate would mean higher tax bills for 7,335 companies that have fewer than 500 employees, not to mention the impacts on larger employers in my state.
Such acute impacts aren’t merely unacceptable, they are also the byproduct of a push that’s totally inconsistent with a global context where “nine of the largest and most advanced economies [have] reduced their corporate tax” rates in recent years. Meanwhile, American companies already pay a combined corporate rate, inclusive of state and local taxes, of more than 25 percent. Europe’s average corporate tax rate, by contrast, was 19.99 percent last year, and OECD countries pay an average rate of 23.4 percent. Any increase in the U.S. rate would put us even further behind global competitors, including China, whose tax ceiling drops down to as low as 10 and 15 percent for certain industries the country is targeting in order to bolster China’s supply chain dominance. As the budget process moves forward, it is critical for legislators to keep this landscape in mind and ensure that any funding mechanism keeps America competitive in the global marketplace.
Here at home, the American people recognize the harm of a rate increase as our nation recovers from historic economic and public health crises. In fact according to a recent poll, Americans oppose tax hikes “as the US comes out of the coronavirus pandemic and economic problems it caused” by an overwhelming 80-20 margin. Among those opposed include Greg Hertz of Polson, Montana, a state lawmaker who has been in the grocery business for decades. As Greg cautions, “raising corporate income taxes just isn’t impacting large multinational corporations, it’s impacting small business owners like myself.” Local companies like Jojo’s Jerky “might not make it” if “Washington raises our taxes,” adds Hans Hippert of Las Vegas, Nevada. And “staying competitive by keeping taxes low” helps businesses like the Gilbert, Arizona-based Bushtex “continue to grow, create jobs, and increase wages,” per president and CEO Adelaida Severson.
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