C Corp Tax Rate could increase to 28%

Before the TCJA reduced the highest marginal rate on C corps to 21%, the former 35% rate for U.S.
corporations was the highest globally. (Japan had been 37%, but it previously moved to reduce it
significantly). Meanwhile, the average corporate rate for the countries in the World Trade Organization
was 25% (which is what both Romney and Obama proposed in the presidential debates leading up to
the 2008 election). Even though the TCJA decreased the rate to 21%, it left the U.S. behind Ireland at
12.5%, Canada at 15%, and the United Kingdom at 19% (as well as several other countries).

Comment: Biden appears to be open to perhaps an increase to only 25%. And Sen. Manchin has
expressed that this would be acceptable, but not an increase to 28%. With every vote needed in the
Senate, this will be an important consideration. Nevertheless, unlike the TCJA’s changes to the individual
rates, the corporate rate reduction was permanent. This change would be the single biggest tax revenue
raiser among the President’s proposals, with an estimated $858 billion in additional tax revenue next
decade.

Authored by:
Dr. John Connors, J.D., CPA, LLM
Tax Educator’s Network, LLC
[email protected]
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