by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Patrick Gleason of Americans for Tax Reform offers Forbes readers a warning about one potential impact of the fall election: tax hikes in 2021.
Aside from the Supreme Court and other judicial appointments, among the most significant achievements of the Trump administration thus far is the corporate tax rate cut from 35% to 21%, which made it so the U.S. no longer has the highest corporate income tax in the developed world. Former Vice President Joe Biden has made it clear he wants to undo that achievement if he’s victorious in November.
In his October 15 town hall with George Stephanopolous, Joe Biden reiterated that he wants to raise the federal corporate income tax by more than 33%, taking the rate from 21% to 28%. At 28%, Biden’s proposal would put the U.S. corporate rate back above the European average. Biden’s proposal would also set the U.S. corporate tax at a higher level than that of communist China. …
… While Joe Biden is running on a plan to undo federal corporate tax relief, Governor Cooper has been critical of what he calls the “tax breaks for corporations” enacted by the Republican controlled General Assembly and his predecessor, former Governor Pat McCrory (R). As recently as 2013, the combined federal and state corporate tax rate paid by businesses in North Carolina was 41.9%. Today that combined corporate rate is 23.5%.
North Carolina’s state corporate tax rate is 2.5% today, the lowest rate among the states that levy a corporate income tax. It was only seven years ago that North Carolina had the highest corporate tax rate in the southeast at 6.9%. Were Democrats to take control of the North Carolina General Assembly and undo the tax cuts approve by North Carolina Republicans, which began in 2013, it would result in a 176% state corporate tax increase, which makes Biden’s proposed 33% corporate rate hike look paltry by comparison.