Unlike many other growth-promoting tax reforms, the corporate tax does not expire at the end of 2025, but some politicians and President Biden have proposed an increase.

NAM recently spoke with Rep. Carol Miller (R-WV), head of the House Budget Committee’s Supply Chain Tax Team, about how raising the corporate tax would “devastate” manufacturing companies and what she and her congressional colleagues are doing to maintain the current tax rate.

“Devastating for every American”: A corporate tax increase from the current 21% would be devastating, said Rep. Miller. She is doing everything she can to prevent this.

• “If the corporate tax rate goes up, it would be devastating for every American, from small business owners to CEOs looking to grow their business,” Rep. Miller told us. “Raising the corporate tax rate means higher prices at a time when the U.S. struggles to remain competitive on a global scale. The best thing we can do in Congress is to anchor the corporate tax rate at 21% by reauthorizing (the Tax Cuts and Jobs Act of 2017) in 2025 – or better yet, cut it even further.”
• Before tax reform, the United States had the highest corporate tax rate in the Organization for Economic Co-operation and Development (OECD) and the third-highest rate in the world at 35 percent. This hampered America’s ability to attract investment in manufacturing.

The effect of 21%: Representative. Miller stressed that the reduction in the corporate tax rate “has had only positive effects on the US economy.”

• “When the pandemic hit and markets fell due to uncertainty and instability, the lower corporate tax rate gave companies more flexibility to help their employees and keep costs down instead of paying astronomical taxes to the government,” she continued. “The lower corporate tax rate protected jobs, helped drive more economic growth, and makes a huge difference for American families struggling with inflation.”
• In 2018, when the 21 percent tax rate took effect, manufacturers created more than 260,000 jobs and were able to raise wages by three percent – the fastest pace in 15 years.

What manufacturers can do: To help maintain the 21% corporate tax rate, manufacturers should clearly communicate its importance to the U.S. economy.

• “Tell those who may not know why the corporate tax rate is so important,” concluded Rep. Miller. “Some people believe that you have to raise taxes on corporations to reduce inflation. That’s not true. Prices only go down when costs to businesses go down, and the corporate tax rate is an effective way to do that while also stimulating the American economy.”

Join us: NAM’s Manufacturing Wins tax campaign gives manufacturers the opportunity to share their experiences with tax reform with policymakers. You can join the campaign at www.NAM.org/MfgWins.

Learn more: Our full interview with Rep. Miller is available here.