September 16, 2021
By Victor Riches
The U.S. House of Representatives recently passed a $3.5 trillion budget blueprint, laying the groundwork for huge tax increases to fund a massive federal expansion of government into issues traditionally handled by the states. This hefty price tag doesn’t even include the long-touted $1 trillion infrastructure bill, which is itself one of the largest non-emergency spending measures of the past 50 years.
This profligate tax-and-spend mentality conveniently omits one extremely important factor: The United States has barely started to recover from the wreckage inflicted by a pandemic that shows few signs of ending anytime soon. Yet increasing taxes is a key component of the left’s sweeping legislative agenda. Federal officials are proposing to raise the corporate tax rate from 21 percent to 28 percent, as well as doubling the Global Intangible Low-Taxed Income (GILTI) rate, which is a special category of taxation on overseas profits.
These changes would put America’s fragile economic recovery at risk, harm businesses across the board, and return the U.S. to the unenviable position of having the highest corporate tax rate of the world’s advanced economies. When accounting for state corporate income taxes, the U.S.’s true corporate tax rate would exceed 32 percent, making communist China’s 25 percent seem downright conservative by comparison. Given that countless businesses are still reeling from the economic impacts of the pandemic, it is imprudent to raise taxes on the very entities needed to power our recovery.
Victor Riches is the President and CEO of the Goldwater Institute.