U.S. Corporate Federal Income taxes in 2024 are set at 21%. In the past, they have been as high as 35%. Many Democrats would like to see them higher again (at least 28% and some would prefer 35%). That would be a great mistake for the following reasons:
1. U.S. Corporations compete with other nations for business both in America and globally. Average global Corporate income taxes are around 21% with China at 12.5%. Therefore raising US corporate income taxes means that American companies would be at an economic disadvantage and therefore less competitive than foreign companies regarding the prices they must charge to cover their expenses and still make a net profit. This would result in less goods and services sold by American companies resulting in job layoffs, less future job hirings, and smaller wages for American workers.
2. In addition to Federal corporate income taxes, American companies also pay:
A. Social Security taxes.
B. State income taxes in most states.
C. Capital Gains taxes
All these taxes, combined with Federal income taxes, make it harder for American companies to successfully compete with foreign companies for business, thus further eroding employment and wages.
Bottom Line - Higher taxes on Corporations are ultimately paid for by Americans in the form of less jobs, lower wages, and higher prices on products and services.
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