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Tags: corporate | tax rate | republicans | democrats | joe biden | donald trump

Political Showdown Looms on Corporate Tax Rate

By    |   Tuesday, 18 June 2024 09:56 AM EDT

The 21% corporate tax rate continues to spark a political fight with Democrats pushing for a rate of 28% and some Republicans pressing for a rate as low as 15%.

The Wall Street Journal reported that the battle won't likely end until the November election and, even then, will depend on a party gaining control of the House, Senate, and White House.

Fifty percent of the Republicans' 2017 rate cut would be reversed if President Joe Biden's 28% rate gets approved.

In addition, it would make the U.S. corporate tax rate among the highest in major global economies. A 15% tax rate being pushed by some Republicans would lower the tax rate to its lowest since 1935, the Journal said.

The Journal noted that the GOP hasn't settled on a plan and that former President Donald Trump has said he wants a 20% corporate rate.

Biden, in his $7.3 trillion budget proposal for the 2025 fiscal year, is looking to raise the corporate tax rate on billion-dollar companies from 15% to 21% and the overall corporate tax rate to 28%, CNBC reported. He also wants a minimum 25% tax on the unrealized income of the wealthiest households.

"Raising the corporate tax rate to 28% would result in an immediate loss of approximately 1 million American jobs over the first two years, and 600,000 jobs every year over the next 10 years," Trump's campaign said on its website.

The Journal also noted that each percentage point represents a $130 billion gap over a decade between the two parties figures, creating a more than $1 trillion separation between the two parties.

"Why would we want to put U.S. companies in an uncompetitive situation? And if we did that, why would we expect that we would attract investment to the U.S.?" said Jon Moeller, chief executive at Procter & Gamble.

Moeller heads tax-policy advocacy for the Business Roundtable, a group of large-company executives that with Trump last week, according to the Journal.

The group is set to launch an eight-figure spending campaign in support of maintaining the 21% rate and extending international tax-law changes that lapse after next year.

Democrats attempted to raise corporate tax rates after taking power, but that failed after Sen. Kyrsten Sinema, I-Ariz., objected, and the 21% rate remained.

"The corporate tax share is already low and corporate profits are at record highs," said Lael Brainard, White House national economic adviser. "Any way you look at it, we are not raising enough from the corporate side."

Republicans and executives see the 21% corporate tax rate and accompanying changes to international tax rules as successful.

They maintain that no U.S. companies have inverted — taken a foreign address for tax savings — since 2017 and they warn that a higher rate would harm the economy.

Senate Finance Committee Democrats will meet soon to discuss the 2025 tax debate, the Journal said. Meanwhile, Sen. Mark Warner, D-Va., said he is still undecided on Biden's call for a 28% rate.

"It's interesting when I hear from some corporate CEOs who argue for a competitive tax rate but then also complain about our $34 trillion debt," he said.

Jeffrey Rodack

Jeffrey Rodack, who has nearly a half century in news as a senior editor and city editor for national and local publications, has covered politics for Newsmax for nearly seven years.

© 2024 Newsmax. All rights reserved.


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The 21% corporate tax rate continues to spark a political fight with Democrats pushing for a rate of 28% and some Republicans pressing for a rate as low as 15%.
corporate, tax rate, republicans, democrats, joe biden, donald trump
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2024-56-18
Tuesday, 18 June 2024 09:56 AM
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