President Joe Biden's proposed corporate tax hikes would disproportionately harm U.S. workers, retirees and small businesses, including 1.4 million small-business C corps and the 98% of Americans who earn less than $500,000, according to new research by the Joint Committee on Taxation.
House Ways and Means top Republican Leader Rep. Kevin Brady, R-Texas, and Senate Finance Committee Ranking Member Sen. Mike Crapo, R-Idaho, released the analysis Monday afternoon.
"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 Brady and Crapo, who asked JCT to conduct the research.
According to the JCT research, as explained by Brady and Crapo:
- Within 10 years of a corporate tax increase from 21% to 25%, 66.3% of the corporate tax burden would be borne by taxpayers with income well below $500,000.
- Of the more than 172 million taxpayers who would bear the burden of the increased corporate tax rate, 98.4%, or about 169 million, have incomes below $500,000.
- Separate analysis shows that corporate tax increases would hit 1.4 million small businesses organized as C 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.
A recent U.S. Chamber of Commerce report found that while the majority of the more than 30 million small businesses in the U.S. are pass-through entities in which tax obligations are passed to the owners, 1.4 million of them are organized as C corporations and thus subject to the corporate tax.
