Washington, D.C.–Today, U.S. Senate Finance Committee
Ranking Member Mike Crapo (R-Idaho) and U.S. House Ways and Means Ranking
Member Kevin Brady (R-Texas) released an analysis showing that proposed corporate tax hikes would fall directly on middle-class
Americans. The analysis, performed by the non-partisan Joint Committee on
Taxation (JCT), shows that increasing the corporate tax burden would
disproportionately harm U.S. workers, retirees and small businesses, including
1.4 million small business C corporations and the 98 percent of Americans who
earn less than $500,000.
“This study supports what we’ve long
known–corporate tax hikes are primarily
borne by workers and retirees, and certainly the middle class–those making well
below $400,000 a year,” said Crapo and Brady. “America’s health
and economic recovery remain very fragile, and may get worse again before
getting better. Unemployment is still too high and inflation is a real
concern. Now is not the time to raise taxes on the very people we are
asking to lead us out of this crisis.”
Key
points from the analysis:
Increasing the corporate tax burden would disproportionately harm
U.S. workers, retirees and small businesses.
- Within
10 years of a corporate tax increase from 21 percent to 25 percent, 66.3
percent of the corporate tax burden would be borne by lower- and
middle-income taxpayers with income well below $500,000. - This
statistic becomes only more striking in absolute number of taxpayers. Of
the more than 172 million taxpayers who would bear the burden of the increased
corporate tax rate, 98.4 percent, or about 169 million, have incomes
under $500,000. - Separate
analysis shows that corporate tax increases would hit 1.4 million small businesses
organized as “C corporations.”
Middle-income
Americans–not just the wealthy–have a stake in the financial success of U.S.
corporations.
- Of
the portion of U.S. corporate ownership (stocks, bonds, pensions, IRAs and
other retirement accounts) held by U.S. taxpayers, there are about 107.8
million U.S. taxpayers who have some ownership stake in U.S.
corporations. - Of
those 107.8 million U.S. taxpayers with a taxable holding of U.S. corporate
equities and bonds, about 97.7 percent, or about 105 million, earn
$500,000 or less a year.
The
tax burden on the over 98 percent of Americans who make less than $500,000 per
year will increase over time.
- In dollar terms,
for 2022, a corporate rate increase to 25 percent would raise revenues from
U.S. taxpayers by $27.7 billion, and about 57 percent of that
additional revenue ($15.8 billion) would come from taxpayers earning less
than $500,000 per year. - Of the $40.4
billion in increased corporate tax burden in the U.S. in 2031, 66.3 percent
of the burden of the increase (or $26.8 billion) will be borne by lower- and
middle-income taxpayers with income under $500,000. - The Left-leaning Tax Policy Center has already shown that Democrats’ tax increases would fall on the middle class.
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