Last updated on: 1/22/2024 | Author: ProCon.org

Should the Federal Corporate Income Tax Rate Be Raised?

The creation of the federal corporate income tax occurred in 1909, when the uniform rate was 1% for all business income above $5,000. Since then the rate has increased to as high as 52.8% in 1969. Today’s rate is set at 21% for all companies. For more on the corporate tax rate, explore the ProCon debate.

PRO (yes)

Pro

Joe Biden:

“The [Fiscal Year 2024] Budget includes an increase to the rate that corporations pay in taxes on their profits. Corporations received an enormous tax break in 2017, cutting effective U.S. tax rates for U.S. corporations to a low of less than 10 percent. While their profits have soared, their investment in the economy did not. Their shareholders and top executives reaped the benefits, without the promised trickle down to workers, consumers, or communities. The Budget would set the corporate tax rate at 28 percent, still well below the 35 percent rate that prevailed prior to the 2017 tax law.”

Editors’ Note: Biden also championed an OECD initiative to establish a 15% minimum global corporate tax rate.

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Office of Management and Budget and the White House, “Budget of the U.S. Government: Fiscal Year 2024,” whitehouse.gov, 2023
Source for Editors’ Note: White House, “Statement by President Joe Biden on Today’s Agreement of 130 Countries to Support a Global Minimum Tax for the World’s Largest Corporations,” whitehouse.gov, July 1, 2021

Pro

Robert F. Kennedy, Jr:

“How exactly is Mr. Kennedy going to cut inflation? [Among other actions, he will] … Reduce government deficits that inflate the money supply, by cutting defense spending and corporate giveaways, and making big corporations pay their fair share of taxes.”

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Kennedy24, “Frequently Asked Questions,” kennedy24/com (accessed Dec. 14, 2023)

CON (no)

Con

Nikki Haley:

“The first thing we want to do is eliminate the corporate income tax. To be able to say we [South Carolina] are a right-to-work state and a no-corporate-income-tax state is going to cause businesses to want to come, and it will create jobs in the process.”

Editors’ Note: Haley stated the above while running for South Carolina governor in Aug. 2010.

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Mark Murray, “Here’s Where Nikki Haley Stands on Key Issues,” nbcnews.com, Feb. 15, 2023

Con

Donald Trump:

“The corporate tax rate, as you know, will be lowered from 35 to 21 percent. That means that more products will be made in the USA. A lot of things are going to be happening in the USA. We’re going to bring back our companies. They’ve already started coming back.”

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White House Archives, “Remarks by President Trump at Signing of H.R. 1, Tax Cuts and Jobs Bill Act, and H.R. 1370,” trumpwhitehouse.archives.gov, Dec. 22, 2017