The Democrats are at it again. Another day, another trillion-dollar tax increase.
This time it is the faltering former frontrunner, Joe Biden, pitching nearly $1 trillion in new corporate taxes over 10 years to pay for healthcare, climate change, and other requisite gimme gimmes of the Democrat Way. This, on top of $2.2 trillion in previously announced Biden tax hikes.
The latest Biden plan would raise the corporate income tax rate to 28% from President Trump’s 21% (that’s a 33% increase), establish a new minimum tax on companies with over $100 million a year in profit (to raise $400 billion from 300 companies in a decade), and double to 21% the tax rate on profits held overseas (to raise $300 billion).
Not to worry, right? A tax on corporations is, at least, not a tax on the people, so the argument goes. Make companies pay for it.
It may be galling to some that Amazon.com can earn billions in profits and end up paying scant income tax because of legally allowable deductions for research and development, employee stock plans, and other expenses. But those are the rules, and every company should use them to their utmost advantage, legally.
The bigger problem is that, in reality, a tax on corporations is really a tax on their workers: it comes out of their paychecks. Companies end up paying the government instead of investing those sums in expanding production, acquiring businesses, and paying higher salaries, bonuses, raises, and benefits to their employees.