Tax Foundation: Plan to Raise Taxes on Corporations, Shareholders Would Harm U.S. Competitiveness

President-elect Joe Biden has proposed raising taxes on U.S. corporations — something that’s a stronger possibility now that Democrats have won control of the Senate. The Biden plan would increase the statutory federal corporate income tax rate from 21% to 28%, while taxing long-term capital gains and qualified dividends at the ordinary income tax rate of 39.6% on income above $1 million, thereby exacerbating the double taxation of corporate income.

This week, the Tax Foundation published this analysis that says if both proposals become reality, the top integrated tax rate on distributed dividends would increase from 47.47% to 62.73%, which would be the highest among the OECD countries and “undercut American economic competitiveness.” 1/14/2021