Corporations had ample warning—an entire presidential campaign—that tax increases were coming. But that doesn’t take the sting out of President Biden’s proposal toA tax increase, which would take effect as early as January 2022, would cut into corporate profits as the economy recovers, and the Biden plan could reduce the earnings of companies in the S&P 500 by at least 10%, said accounting analyst Dave Zion of the Zion Research Group.
“That’s a big drop in earnings and some companies get hit harder than others,” Mr. Zion said. Those with a high proportion of domestic earnings are directly affected by the rate increase while multinationals are likely to focus more on the changes to the minimum tax on foreign income. Stock prices already assume some kind of an increase, Mr. Zion said. Republican lawmakers have signaled they won’t support an increase and resistance from moderate Democrats might make a hike to a 25% rate more realistic than 28%, Washington policy analysts say.before the 2017 tax overhaul. Many companies pay a far lower effective rate because of various deductions and credits.
“There’s no magic behind 28%,” James Lucier, a policy analyst with Capital Alpha Partners. “It is not a number that has any significance, it’s just a way to telegraph that the corporate rate needs to be higher.”
Oh yeah? And what are their International competitors tax rates? (Very likely higher).
Who does the WSJ think pay an increased tax rate? Corporations don't pull it out of their pocket - isn't it people who buy corporations' products and services that provide the revenue for corporations to pay taxes? Isn't the problem is corporations don't pay their fair share?
He doesn’t have a clue - about anything! Total joke
How many corporations changed a single thing about their business practices after the big Trump tax cut? I never saw any announcements that actually came to pass about new plants, employment etc etc, even before COVID hit. Let's not pretend that lower tax helps here.
He’s full of it!
Biden has never been right. Political stooge.
President Biden knows better!
Would the critics who grizzle about a tax hike for the super wealthy please provide verifiable evidence to back their claims that it would hurt US companies? Perhaps these same companies have had the benefits of corporate socialism for far too long while their employees suffer.
many corps benefited from tax cut so they did not have to pay taxes
all talk we the p;eople pay the super rich suits property taxes just so they can take 4 weeks Vaations on we the peoples dime
Wow. Are we supposed to be surprised that these are the two reactions? Is this remedial reporting? Your newspaper has gone way downhill in its depth and in its article subject matter decisions. You are now worse than a laughingstock as a purported erudite financial source.
Oh no how will the companies fund their stock buyback programs?
▬001 Unbounded giveaways & freebies are not without any side effects, that commonly goes to taxing the businesses & likely the middle class. Money is not picked out of nowhere, that is why Americans need to observe more on how the government spends each tax dollar. ▬001
The U.S. economy is about to blaze into a wildfire, and that won't be a bad thing anytime soon.
The same critics would have warned that ending slavery would hurt cotton plantations
Wait a minute. Prior to Trump the companies were at a 31% tax rate so moving it back to 28% still means they had a tax cut. Also regardless of rate with all the loopholes most companies don't pay near that level. Many got away with little to no tax even when at 31% tax rate.
To win some republican support maybe Biden should describe the corporate tax rise as punishment for corporate interference in election laws.
President Joe Biden will give more relief to Americans and humanity
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Yea right. They were 35% 4 yrs ago. He is only taking it up by half. Still low.
Digital giants surely dislike tax increase and profit flow blocking.
It will fuel jobs created by infrastructure build up. This is badly needed by Americans and in the years to come would bring new opportunities and inventions! This is investment in America and not give away to riches!
Or (and I know it’s crazy talk) leave the tax rate the same, but remove the loopholes and stupid deductions.
Could help China? Imagine that
If they took less profits for their big stock options, and millions of dollars in salaries and lavish life styles, there would be plenty to go around.
It WILL hurt the economy and people's savings. The Corp tax increase will be passed on the consumers.
Lower earnings post-tax leads to lower dividends to shareholders.
Does the rate really mean much? How much did Amazon pay in taxes last year? Lol.
Sounds like an intramural problem of Democrat constituencies. Corporate America vs Far Left .. hopefully they eat each other whole . It’s time for the Right to give corporations over to that which they say they support .
Soooo, if republicans don’t want to pay to beef up our infrastructure, I guess Florida is on its own with the imminent flood? Isn’t that what Trump told blue states?
Biden Obama Roosevelt Tried and Failed this Economic Approach Why in the world should it Work now. History has Doomed THIS STRATEGY. Math is an Incorruptible Science. This Plan Mathematically Fails every accounting principle. IT has FAILED EVERY WHERE IN THE WORLD THEY TRIED IT
Raising taxes will hurt those that don't pay them anyways ability to fleece Americans without these losses being immediately noticed.pbp
Yet the giant media approved so let’s hope all those journalists income tax is raised.
TRUTH=we need to throw away the existing tax code. Business pay 15% of gross revenue, individuals pay 5% of ALL income. NO DEDUCTIONS, NO TAX ATTORNEYS, NO LENGTHY TAX FORMS, NO IRS!
Let’s also mention the inflation due to passing trillions of debt too
The Dems always seem to have better economies when in Power. Tax breaks DONT work.
If I have to pay 32% every year then these massive corporations should pay their fair share. The only difference is I don’t have money to influence politicians and the media.
These corporations are sucking the life out of the planet,supported by the small taxpayer. The banks still owe trillions, by the way
Hey let’s put it in historical context and see how it HAHAHAHA you guys are idiots
You want to take more of their money and force them to pay more in salaries at the same time. How do small businesses survive this?
288 big and profitable Fortune 500 corporations paid an average effective federal tax rate of just 19.4% from 2008 to 2012. That’s when the tax rate was 35%. So maybe if the rate rises to the 28% Biden wants, they may actually pay the 21% Trump gifted them.
You lead with 'Critics say...' a lot. How about you name these critics?
Large companies will still get around it. % means nothing if there are loop holes. I paid more in taxes than Amazon
Nope, it won’t.
This proposed increase will hurt American business worldwide.
Rich people saying it's bad. Name the critics. Check their personal worth. I'd bet their higher than average wages.
The living standard is high due to the hyper profit of the monopoly financial industry. The real economy has to pay high for labor if the necessary spending of a household is high. Financial monopoly in Wall Street is the root cause of government and household debts. Tax irrlvnt.
Very true because those digital ba?ds don’t pay any tax anyway. They are ripping everybody off big time!!
Whether it’s 35% or 28% how many companies paid that rate given all the tax loopholes?
The economy and corporations were doing fine when Trump took over. He dropped their tax rate significantly. Biden is putting it back and closing loopholes so corporations like Amazon that pay ZERO in taxes pay their fair share.
Is it 26% now? After the hundreds of billions they made over the past year they have the audacity to bitch about a 2% increase in taxes? Whatever, tax them. We spent enough of our pennies on these gluttons. It’s time corporations/wealthy actually pay their fair share in taxes.
We can up the tax rate to help pay for infrastructure or We can continue to 'charge it' putting infrastructure costs on debt. or We can say 'screw infrastructure' and continue to allow our nation fall behind the world. WE CAN NOT TAX WORKERS MORE
I think paulkrugman can easily demonstrate that Trump's tax breaks were heavily skewed towards his rich demographics! No such thing as TrickleDownEconomics!
and what happens to our tax dollars? another war? another bailout? enough is enough
And I wonder which side the Wall Street Journal comes down on 🤪
In reality it will only affect small businesses, so ya it’s bad
April fools was a few days ago
I'm middle class and pay 24% in taxes does that hurt my ability to compete in the global market as well?
Citizens United sold Americans out to the highest bidder years ago.
One good thing about the ... ahem... science... of economics. You can find individuals with ... double ahem...stellar minds willing to say the exact opposite of one another. The simple truth is that we need to fix our infrastructure. GROW UP
I remember when you told us cutting taxes would lower the debt. Reagan said it, Bush II said it, the last guy said it and every time the debt increased.
Only in America, there are Corporations that pay literally Zero effective taxes! This exists in no other Country, none! And they dare attempt to convince us paying their fair share is bad! Loool
'We don't know how to properly appropriate taxes, so we will raise them and further the congressional welfare that goes unaddressed'. Thats what I read.
Lol, guess who those critics are? Lobbyists for those Companies! Looooooool
good luck