by Bernard P. Lawson, The Chicago Times
June 14, 2021
WASHINGTON — If the Biden administration has its way, the federal corporate tax rate, which was reduced from 35 percent to 21 percent under the Trump administration, could rise to 28 percent. The increase, when combined with the average of state corporate tax rates, would result in a combined top corporate tax rate of 32.4 percent, the highest in the industrialized world. Every member of the Organization for Economic Cooperation and Development, or G7, as well as all major trading partners and competitors, including China, would be included.
According to Grover Norquist, president of Americans for Tax Reform, the proposed tax hikes may have unintended consequences, such as higher utility bills. When Biden raises the corporate income tax your utility bills will rise, including water, electric, and gas bills which are required by law to pass on every dollar of federal corporate income tax to consumers. Some utilities were able to pass on the tax savings from Trump’s tax cuts in the form of lower utility bills.
Liberal economists believe lowering the corporate income tax increases wages by 50 to 70% because people are more productive as a result of having more capital per person. As a result of the lower corporate tax rate, wages rise. The United States’ median income climbed by $4,400 in 2019, a 6.8% increase. More capital, investment, machinery, and computers were accessible per person as a result of the lower corporate income tax, allowing people to be more effective, efficient, and productive.
The Biden White House has been adamant about increasing the rate. Economists counter that raising the rate would effectively serve as a regressive tax hike, disproportionately harming families who need the money the most.
Biden has pledged that no tax increases will be imposed on families earning less than $400,000 per year.
An increase in the federal corporation rate will most likely in higher power bills, which is just one of many Biden tax plans that would hike prices for families earning less than $400,000 per year. Not to mention the overall higher inflation expected over the next few years. Biden is rising America’s cost of living by increasing the corporate income tax which only be passed on to consumers.