Policy and Legal

Unlike many other pro-growth tax reform provisions, the corporate tax rate isn’t set to expire at the end of 2025, but some policymakers and President Biden have proposed increasing it.

The NAM recently talked to Rep. Carol Miller (R-WV), the head of the House Ways and Means Committee’s Supply Chain Tax Team, about how raising the corporate tax rate would “devastate” manufacturers, and what she and her colleagues in Congress are doing to keep it where it is.

“Devastating for every American”: Raising the corporate tax rate from its current, competitive 21% rate would be ruinous, Rep. Miller said. She’s focused on preventing that from happening.

• “If the corporate rate goes up, it would be devastating for every American, from the small business owner to the CEO who is trying to expand their business,” Rep. Miller told us. “The corporate rate rising means there will be higher prices while the U.S. struggles to compete on the global scale. The best thing we can do in Congress is cement the corporate rate at 21%—or better yet, lower it even more—through the [2017 Tax Cuts and Jobs Act] reauthorization in 2025.”
• Prior to tax reform, the U.S. had the highest corporate tax rate in the Organisation for Economic Co-operation and Development at 35%, and the third-highest rate in the entire world, harming America’s ability to attract manufacturing investment.

The effect of 21%: Rep. Miller emphasized that the U.S. economy has “seen only positive impact from the corporate rate being lowered.”

• “When the pandemic hit and the markets were falling due to uncertainty and instability, the lower corporate rate gave companies more flexibility to help their employees and keep costs low instead of paying the government sky-high taxes,” she went on. “The lower corporate rate protected jobs, helped produce more economic growth and makes all the difference for American families who are struggling with inflation.”
• In 2018, the year the 21% rate took effect, manufacturers created more than 260,000 jobs and were able to raise wages by 3%, the fastest pace in 15 years.

What manufacturers can do: To help preserve the 21% corporate tax rate, manufacturers should be vocal about its importance to the U.S. economy.

• “Spread the word to those who might not know why the corporate rate is so important,” Rep. Miller concluded. “Some think that in order to bring down inflation, you need to raise taxes on businesses. That is not true. Prices only go down if costs for companies go down, and the corporate rate is an effective way to do that while simultaneously boosting the American economy.”

Get involved: The NAM’s “Manufacturing Wins” tax campaign gives manufacturers the opportunity to share their tax reform stories with policymakers. You can join the campaign at www.NAM.org/MfgWins.

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