Washington’s Proposed Tax Increases Would Impact All of Us
Current proposals would increase taxes by trillions of dollars — find out how those tax hikes would affect Americans across the country.
Corporate taxes may appear to target corporations, but economists agree: people bear the cost of corporate tax increases. While corporate tax hikes would initially fall on American businesses — American workers, consumers and savers would end up paying the bill in several ways:
- Stagnant or lower incomes: Higher corporate taxes will reduce jobs and pay. It’s estimated that after-tax income would decline by an average of 1.7% if the proposed tax increases became law. Higher taxes on corporations mean fewer funds available for investments that boost productivity growth; less productivity growth in turn will suppress wages.
- Fewer jobs: Jobs will disappear because corporations will lack the funds for research and innovation. If U.S. companies are forced to pay higher taxes at home and abroad than their foreign competitors, jobs and wages of U.S. employers will contract as their foreign competitors gain market share and expand. The Tax Foundation estimates the current proposal to increase corporate taxes will cost the U.S. 303,000 full-time equivalent jobs.
- Higher prices: Higher corporate taxes can also be passed on to consumers in the form of higher prices on the goods and services they buy. Some estimates are that as much as 30% of corporate taxes are passed along to consumers through higher prices.
- Weaker stock performance and retirement savings: The income Americans rely on for their savings and retirement from their investment in corporate stock and mutual funds will be diminished by higher corporate taxes, reducing the savings and retirement funds of tens of millions of middle class Americans.
A recent study by the Joint Committee on Taxation revealed that families making less than $500,000 a year make up 98% of those hurt by corporate tax increases. Americans simply cannot afford the costs that will be shifted to them in the form of lower pay, reduced savings and higher prices if the current proposal to raise corporate taxes becomes law.
With the United States still emerging from the pandemic-induced economic slowdown, facing unknown risks of other variants affecting this country, and millions of unemployed Americans seeking work, this is not the time to increase taxes.
Make sure your voice is heard — call your representatives and tell them about the impact that unintended consequences of corporate tax increases have on people across the country.
To learn more about the Alliance for Competitive Taxation, visit the website at www.actontaxreform.com/.