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The most important stories about money and politics in the race for the White House
Kamala Harris is aiming to increase the US corporate tax rate to 28 percent if she moves into the White House in November. This step is intended to lead to higher government revenues from US corporate financing and is likely to be met with criticism in the business community.
Harris’ presidential campaign said Monday that it would stick with a proposal put forward by President Joe Biden in recent years to raise the corporate tax rate from 21 percent to 28 percent.
The statement comes as the vice president is finalizing her economic plans before being officially named as the presidential candidate at the Democratic National Convention in Chicago this week.
Her corporate tax plan stands in stark contrast to that of her presidential rival, Republican candidate Donald Trump, who proposes cutting the corporate tax rate to 15 percent. Harris’ proposal would make the U.S. corporate tax rate 25 percent, higher than the U.K. and one of the highest among developed countries.
“Unlike Donald Trump, whose extreme ‘Project 2025’ agenda would increase the budget deficit, raise taxes on the middle class by $3,900 and plunge our economy into recession, her plan is a fiscally responsible way to put money back in the pockets of working people and ensure that billionaires and major corporations pay their fair share,” a Harris campaign spokesman said.
Last week, Harris said she wants to cut taxes for the middle class, including families with children, increase incentives for first-time home buyers and ban price gouging by food and grocery companies, showing she is addressing widespread voters’ concerns about the cost of living.
Raising the corporate tax rate could give the U.S. government more revenue to spend on other programs, but Harris left open what the extra money would be used for.
Their decision to stick with Biden’s goal of raising the corporate tax rate comes ahead of what is expected to be a bitter fight in Congress next year over the expiration of the sweeping tax cuts Republicans passed in 2017. Those cuts reduced the corporate tax rate from a top rate of 35 percent to 21 percent, and the outcome of those negotiations will depend as much on control of Congress as on who wins the presidential election.
Despite the significant decline in the nominal tax rate after 2017, corporate tax revenues are now higher than they were at the start of the higher tax rate, partly due to rising profits.
The business lobby group Business Roundtable estimates that Trump’s 2017 tax reform resulted in $2.5 trillion in international profits flowing back to the United States. It is calling on politicians to maintain a corporate tax rate of “no more than 21 percent.”
Unless Democrats succeed in retaking the House of Representatives and retaining control of the Senate, Harris will have a difficult time pushing through a corporate tax increase because Republicans in the Capitol are opposed to it.
