WASHINGTON, D.C. - Today, the U.S. Chamber of Commerce launched a new data center to show the harmful impact of a higher corporate tax rate on businesses, workers, and local economies. The Chamber’s new interactive map quantifies over a 10-year period the negative impacts on consumer prices, workers’ wages, and shareholder returns in every state and congressional district.
“In conjunction with the other pro-growth reforms of the Tax Cuts and Jobs Act, lowering the corporate tax rate significantly boosted domestic investment, increased economic growth, and raised workers' wages,” said Watson McLeish, Senior Vice President for Tax Policy at the Chamber. "It is critical for policymakers to understand that raising the corporate income tax would not only reduce economic output and wage growth but also increase consumer prices.”
“Raising the corporate tax rate from 21% to 28% would increase federal tax revenue by an estimated $910 billion over the next decade. But where would that $910 billion come from? Businesses have only three options to pay for higher taxes: raise prices; reduce costs; or lower returns to investors or shareholders. In reality, they do all three,” McLeish continued.
Recent economic research shows that just over half the cost of higher corporate taxes is borne by consumers in the form of higher prices, with another 28% borne by workers in the form of lower wages and the remaining 20% borne by shareholders (which includes retirement accounts) in the form of lower returns.
For example, in the case of Pennsylvania, raising the corporate tax rate from 21% to 28% would have the following effects over 10 years:
- $8,836,634,350 in lost wages for workers
- $18,824,341,856 in higher prices for consumers
- $6,540,342,822 in lost returns to shareholders
- Total 10-year cost: $34,201,319,027
For a full list of state- and district-level data and a description of the Chamber’s methodology, visit the new data center.
In February, the Chamber released state and congressional district data showing the impact of the 20% pass through deduction for small businesses and stressed the need to preserve the deduction for America’s job creators.
This new interactive map is the latest effort in the Chamber’s Growing America’s Future campaign, an education and advocacy effort in support of maintaining a pro-growth tax code to foster a robust economy that benefits all Americans. The campaign kicked off in May at the Chamber’s 2024 Tax Policy Summit.
As a part of this campaign, the Chamber has put forth policy recommendations, polling, first-hand business stories, and research on the importance of pro-growth tax policies to workers, businesses, and local communities while convening more than 500 business voices to urge the next Congress and administration to commit to no tax increases and promote economic growth.
“Educating policymakers on the vital need to prevent tax increases while promoting economic growth and bringing that message to their districts is the top priority for the Chamber in the weeks and months ahead,” said Neil Bradley, Executive Vice President and Chief Policy Officer at the U.S. Chamber.
This summer, the Chamber put forth the Growth and Opportunity Imperative for America, a series of policy recommendations that will help the United States reach a goal of 3% annual real economic growth. The Chamber also recently unveiled a new resource for policymakers and candidates detailing how a pro-growth tax code benefits American workers, businesses, and the economy.
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