TLDR
- Vice President Kamala Harris proposes raising the U.S. corporate tax rate from 21% to 28%
- This would partially reverse the tax cuts enacted under former President Trump in 2017
- Harris says this is to ensure corporations “pay their fair share” and help working people
- The plan contrasts with Trump’s proposal to cut corporate taxes further to 15%
- Raising the rate to 28% could generate hundreds of billions in additional tax revenue
Vice President Kamala Harris, the Democratic presidential nominee, has announced a plan to raise the U.S. corporate tax rate from 21% to 28% if elected president in November.
This proposal would partially roll back the tax cuts enacted in 2017 under former President Donald Trump’s administration.
Harris’s campaign spokesperson, James Singer, described the plan as
“a fiscally responsible way to put money back in the pockets of working people and ensure billionaires and big corporations pay their fair share.”
The move is part of Harris’s broader economic agenda, which she says focuses on creating opportunities for the middle class.
The current 21% corporate tax rate was established by the Tax Cuts and Jobs Act of 2017, which lowered the rate from 35%. Harris’s proposed 28% would split the difference between the pre-2017 rate and the current rate.
According to estimates from the nonpartisan Congressional Budget Office, each percentage point increase in the corporate tax rate could generate about $100 billion in additional revenue over a decade.
This plan marks a shift from Harris’s position during her 2020 presidential campaign when she called for a full repeal of the Trump tax cuts, which would have returned the corporate rate to 35%. The new 28% target aligns with President Joe Biden’s most recent federal budget proposal.
Harris’s tax plan contrasts sharply with that of her rival, Republican candidate Donald Trump. The former president has pledged to cut taxes further if he returns to the White House, including reducing the corporate rate to 15%. At a recent campaign event in Pennsylvania, Trump stated, “Our plan will massively cut taxes. I gave you the best tax cut in history.”
The debate over corporate tax rates comes as parts of the 2017 tax law are set to expire at the end of 2025. This looming deadline is expected to spark significant debate in Congress next year about which aspects of the law to extend or modify.
Harris’s campaign argues that their approach is more fiscally responsible than Trump’s proposals. They claim Trump’s agenda would “drive up the deficit, increase taxes on the middle class by $3,900, and send our economy spiraling into recession.” However, these claims about the impact of Trump’s plans have not been independently verified.
The Business Roundtable, a corporate lobby group, has urged policymakers to maintain the current 21% rate. They estimate that the 2017 tax reform resulted in $2.5 trillion of international earnings returning to the U.S.
If enacted, Harris’s proposed 28% rate would make the U.S. corporate tax rate higher than some other advanced economies, such as the United Kingdom’s 25% rate.
However, implementing this change would likely face significant challenges. Unless Democrats win control of both the House of Representatives and the Senate, Harris would struggle to enact an increase in the corporate tax rate due to expected opposition from Republicans in Congress.
As the Democratic National Convention kicks off in Chicago, Harris is beginning to offer more details on her economic plans.
In addition to the corporate tax proposal, she has recently discussed ideas such as expanding the child tax credit, easing the cost of homeownership, and lowering medical debt.
The Harris campaign says these initiatives are part of a broader strategy to create an “opportunity economy” that advances economic security, stability, and dignity for the middle class. However, specific details on how these programs would be funded, beyond the proposed corporate tax increase, have not yet been provided.
