Harris' Corporate Tax Rate Push: A Policy Error

Former CBO director Doug Holtz-Eakin argues that Vice President Kamala Harris' proposal for a 28% corporate tax rate is misguided.

Vice President Kamala Harris' proposal for a 28% corporate tax rate is a misguided policy that would hinder economic growth and discourage investment, according to former CBO director Doug Holtz-Eakin.

In a recent debate on Fox News, Holtz-Eakin argued that the proposed tax increase would be detrimental to businesses and the overall economy. He highlighted that the current corporate tax rate of 21% is already competitive compared to other developed countries, and raising it would put American companies at a competitive disadvantage.

Harris' Corporate Tax Rate Push: A Policy Error

Holtz-Eakin further contended that the tax increase would discourage investment, leading to a decrease in job creation and economic growth. He emphasized that businesses rely on profits for investment, and a higher tax rate would erode their capacity to reinvest in their operations and expand their workforce.

He also pointed out that the proposed tax hike would disproportionately affect small businesses, which are often more sensitive to tax changes. Small businesses play a crucial role in job creation and economic dynamism, and a higher tax burden could stifle their growth and innovation.

Harris' Corporate Tax Rate Push: A Policy Error

Moreover, Holtz-Eakin argued that the tax increase would not generate sufficient revenue to fund Harris' spending proposals. He noted that the economic consequences of the tax hike, including reduced investment and growth, would offset any revenue gains.

Holtz-Eakin's analysis aligns with the findings of various economic studies. The Tax Foundation, for instance, estimated that a 28% corporate tax rate would reduce GDP by $1.5 trillion over the next decade and result in a loss of 1.3 million jobs.

Harris' Corporate Tax Rate Push: A Policy Error

The proposed tax hike has also drawn criticism from business groups and economists across the political spectrum. The Business Roundtable, which represents large American companies, has expressed concerns that the tax increase would undermine investment and competitiveness.

Economists from both sides of the aisle have questioned the economic rationale behind the tax hike. Larry Summers, a former Treasury Secretary under President Clinton, has argued that the tax increase would be "harmful to the economy."

In conclusion, Doug Holtz-Eakin's analysis underscores the potential economic consequences of Vice President Harris' corporate tax rate proposal. The proposed tax increase would hinder economic growth, discourage investment, and stifle small business development. Instead of pursuing policies that could undermine the economy, policymakers should focus on fostering a favorable business environment and promoting economic growth.