“The Tax Foundation estimates that a 10 percent general tariff “would raise taxes on American consumers by more than $300 billion a year,” “reduce the size of the U.S. economy by 0.7 percent,” and “eliminate 505,000 full-time equivalent jobs.” Retaliation could “further reduce U.S. GDP by 0.4 percent and eliminate another 322,000 full-time equivalent jobs.”
Trump’s proposed tariffs, including a 60 percent levy on Chinese goods, “would reduce after-tax incomes by about 3.5 percent for those in the bottom half of the income distribution,” the Peterson Institute for International Economics estimates. They “would cost a typical household in the middle of the income distribution at least $1,700 in increased taxes each year.”
Just as Trump ignores those costs, Harris wants voters to believe that raising the corporate income tax rate from 21 percent to 28 percent is simply a matter of “ensur[ing] the wealthiest Americans and the largest corporations pay their fair share.” But that is true only if you overlook the broader economic impact of that change, which would hurt non-wealthy Americans as employees, consumers, and investors.
“Studies have shown that the corporate income tax is the most harmful tax for economic growth,” the Tax Foundation warns. On the flip side, recent research indicates that the Trump-backed 2017 reduction in this tax rate, which moved the U.S. from the high end among industrialized countries to the middle of the pack, “significantly boosted domestic investment.”
By raising the cost of doing business in the United States, a higher corporate tax rate inhibits investment, drives down wage and benefit growth, encourages offshoring of jobs, and reduces the return on retirement savings. “Under a 28 percent corporate rate,” the Tax Foundation estimates, “GDP would fall by $1.84” for “every $1 of higher revenue.””