Kamala Harris Wants to Raise U.S. Corporate Income Tax Rate Higher Than Venezuela’s

Vice President Kamala Harris backs hiking the current 21% federal corporate income tax rate to 35%, higher than socialist Venezuela’s 34% rate.

Vice President Harris’ plan is also significantly higher than President Biden’s proposed plan to hike the corporate rate to 28%. The Harris 35% rate would saddle America with one of the highest corporate income tax rates in the world, ten points higher than Communist China and tied with communist Cuba.

After adding state corporate income taxes, the combined federal-state rate under Harris amounts to about 39%, sticking American employers with a higher tax burden than our competitors and adversaries.

During her previous presidential campaign, then candidate Harris told members of an Iowa roundtable that the corporate tax rate has “got to” be increased.

Harris said:

“We’ve got to increase the corporate tax rate.”

Harris’ plan for a 35% corporate rate is in line with her repeated threats to fully repeal the 2017 Trump tax cuts. This means a return to a 35% corporate tax rate under a President Kamala Harris.

American workers will bear the brunt of Harris’ corporate tax increase.

The non-partisan Joint Committee on Taxation affirmed in congressional testimony that corporate tax rate hikes hit “labor, laborers.”

Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

“Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth.”

According to Stephen Entin of the Tax Foundation, workers bear an estimated 70 percent of the corporate income tax. He wrote in 2017:

“Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome.”

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages. 

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003.

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor.