The same policy was put forward by President Joe Biden in his administration’s fiscal year 2025 budget.
Democratic Presidential candidate Kamala Harris is proposing to increase the corporate tax rate as part of her economic agenda if she wins the presidency in November.
Harris campaign spokesperson James Singer confirmed in a statement on Aug. 19 that Harris is backing an increase in the corporate tax rate from 21 percent, to 28 percent, the same policy put forward by President Joe Biden in his administration’s fiscal year 2025 budget. Changes to the U.S. tax code require approval by Congress before they can be enacted.
Singer says Harris is in favor of rate rise because it’s the most “fiscally responsible way to put money back in the pockets of working people and ensure billionaires and big corporations pay their fair share.”
“As president, Kamala Harris will focus on creating an opportunity economy for the middle class that advances their economic security, stability, and dignity,” he said.
Days earlier at a campaign event in North Carolina on Aug. 16, Harris outlined her economic agenda, which included a pledge to offer housing assistance through government subsidies, to take on price gouging concerns following a period of heightened inflation, and increase child tax credits, among other promises.
According to the Congressional Budget Office, any increase in the corporate tax rate could raise billions in taxes. In its estimates, the federal agency found that a 1 percent increase in the corporate tax rate would generate an additional $96 billion in taxes from 2019 to 2028.
However, critics of increasing corporate tax rates argue it would only encourage businesses to leave American shores for countries with lower rates. In the process, it could see a decrease in available jobs in the United States.
“Tax rate differences among countries can influence businesses’ choices about how and where to invest,” the Congressional Budget Office said.
“To the extent that firms shift their investment and activities to countries with low taxes with the goal of reducing their tax liability at home, economic efficiency declines because firms are not allocating resources to their most productive use.”
Under Republican Presidential candidate former President Donald Trump, the federal government’s 2017 Tax Cuts and Jobs Act slashed corporate tax from 35 percent to 21 percent in an effort to help boost the economy by making it attractive for businesses to operate in the United States. Many of the tax reforms in the bill expire in 2025; whoever wins the upcoming election will have the opportunity to either extend the Trump-era tax cut or let it lapse.
Trump has voiced his intention to make the tax model permanent or even cut the rate further. In an Aug. 8 news conference at the Mar-a-Lago resort in Florida, he argued that he‘d “never seen people get elected by saying, ’We’re going to give you a tax increase.’”
Jacob Burg contributed to this report.