Tax Foundation analysis examines impact of rising corporate tax rate
According to the Tax Foundation, the corporate tax increase proposal included in the Build Back Better Act, which was put forward by the United States House Ways and Means Committee this week, is higher than it is ‘it seems.
In a recent blog post, authors Alex Muresianu and Eric York pointed out that while the reconciliation bill would raise the top federal corporate tax rate from 21% to 26.5%, most companies would face a tax rate higher than 26.5%. This is because most states also levy corporation tax.
Including the state’s average corporate tax rate, they wrote, the United States would have an average corporate tax rate of 30.9%. It would be the third highest corporate tax rate in the Organization for Economic Co-operation and Development (OECD), behind Colombia and Portugal.
“Under current legislation, the United States is very much in line with peer OECD countries and is actually in the middle of the pack when it comes to corporate taxation. Coming back near the top of the OECD for corporate tax rates would be costly for several reasons: it would discourage investment and encourage companies to shift their profits and locate elsewhere, which would translate into less money. job opportunities for Americans and less tax revenue for the US government, ”Muresianu and York wrote.