Newly installed House Budget Committee Chairman John Yarmuth (D-Ky.) has proposed hiking the federal corporate income tax from 21 percent to 28 percent for the fiscal 2020 budget resolution.
The 33 percent increase would push the average corporate tax rate to 34 percent when coupled with state taxes, which average 6 percent nationally, Americans for Tax Reform reported. The 2017 GOP tax overhaul cut the federal corporate tax rate from 35 percent to its current rate of 21 percent.
How would a corporate tax increase impact the economy?
Such an increase would make the U.S. statutory rate higher than many of its competitors, including the United Kingdom (19 percent), Ireland, (12.5 percent), China (25 percent), Canada (26.8 percent), and Germany (29.8 percent), ATR noted.
Also, ATR reported, the "combined corporate rate across the 36 member Organisation for Economic Development and Cooperation (OECD) is currently 23.7 percent."
In turn, the U.S. would be less competitive globally and an increase would negatively affect the nation's strong economy, according to Grover Norquist, president of ATR.
"Hiking the tax rate on American businesses will kill jobs, lower wages, and reduce new investment in America," Norquist said. "Why do the Democrats want to damage American competitiveness and job creation?"
Last week, the Bureau of Labor Statistics announced that 312,000 nonfarm payroll jobs were added in December. Wages have increased 3.2 percent over the past year.
When would the budget proposal reach the floor?
Yarmuth hopes to have the proposal ready for the House floor by April.
"We've told [Majority Leader Steny H. Hoyer of Maryland] that we will have the budget resolution to the floor by the first part of April, and that's the schedule he wants," Yarmuth said, Roll Call reported.
Would individual taxes increase?
Roll Call also reported that Democrats are considering a rate increase for wealthy earners, too, but no specifics were available.