Here Come the Biden Taxes

The middle class will pay for the largest tax increase since 1968

WSJ editorial. Excerpts:

"Mr. Biden’s corporate increase amounts to the restoration of the Obama-era corporate tax burden, only much more so. The GOP tax reform of 2017 was designed to fix a corporate tax system that was uncompetitive and convoluted. Companies paid taxes in countries where they earned the income, but then again if they returned the money to the U.S. Trillions of dollars piled up overseas. Remember the string of corporate “inversions” when CEOs moved their headquarters overseas?

Those inversions all but ended after 2017 as reform lowered the top corporate rate to 21% from 35% and moved the U.S. closer to a territorial tax system in which income is taxed where it is earned. Mr. Clifton [Dan Clifton of Strategas Research Partners] calculates that companies repatriated $1.6 trillion from overseas to the U.S. from 2018-2020, which they deployed for a variety of useful economic purposes. The repatriation total three years before reform: only $495 billion.  

Mr. Biden wants to raise the corporate rate back up to 28%, but that’s the least of his proposals. He also wants to add penalties that would make inversions punitive, and he’d impose a global minimum corporate tax of 21%. This would shoot the tax burden on U.S. companies back toward the top of the developed world list. At least nine major countries have cut their corporate tax rate since 2017, including France, Sweden and the Netherlands."

"The lower 2017 corporate rate was intended to reduce the double taxation of corporate income that is built into the U.S. code. Mr. Clifton calculates that if the Biden plan becomes law the U.S. would have the highest overall tax burden on corporate income—62.7%—in the OECD."

"Kevin Hassett, Aparna Mathur, Laurence Kotlikoff and other economists have done extensive work showing how lower corporate tax rates result in higher wages. Higher after-tax profits mean more corporate investment, which means more productive workers, whom companies can afford to pay more."