News outlets reported that Vice President Kamala Harris proposed raising the corporate tax rate to 28% if she wins the presidency this November, partially rolling back the Trump-era tax cuts that slashed corporate taxes. Even though corporate tax revenue plummeted in response to the Trump tax cuts, and American corporations are undertaxed relative to other developed economies in the OECD, conservative media began assailing Harris’ policy with false claims of immediate and “massive layoffs” and higher inflation.

As the Center on Budget and Policy Priorities has explained, Trump’s 2017 tax cut was skewed to the richest Americans, and the corporate tax cut even moreso, with the bottom 90% of workers gaining nothing from the corporate tax rate cut, while corporate executives earning nearly $1 million a year got an average $50,000 earnings boost. A leading reason that Trump's corporate tax changes benefited the wealthy was the imposition of a flat tax of 21% to replace what had been a graduated rate system, ranging from 15% to 35%.

And thanks to Trump’s tax cuts, even as corporate profits went up during most of his presidency, corporate tax revenue dropped until the pandemic and the years after. Corporate tax revenue as a share of the economy remains near historic lows at under 2% of gross domestic product, and it’s also near historic lows as a share of federal tax revenue. During parts of the 1940s-’50s it made up roughly 30% of federal revenue, but according to the Tax Foundation, corporate taxes made up only 6.5% of federal revenue as recently as 2022.

Meanwhile, the Organisation for Economic Co-operations and Development (OECD) average showed corporate tax revenue in 2020 at just over 15% of total tax revenue, and 3% of GDP, showing that U.S. corporations have a very light tax burden in comparison. In 2023, the Institute of Taxation and Economic Policy estimated that raising the corporate tax rate to 28% would raise more than $1.3 trillion in revenue over 10 years.

Yet conservative media reacted to Harris’ proposal with hyperbolic doom and gloom. Citing an analysis from the Tax Foundation, Fox News personalities claimed that raising the corporate tax rate would lead to “massive layoffs” “right off the bat.” Yet the Tax Foundation’s analysis projected a loss of only 128,000 “full-time equivalent jobs” by 2034. This is a drop in the bucket of the millions of jobs projected to be created over the course of a decade. Other conservatives claimed that raising the corporate tax rate would be inflationary; in reality, tax increases are broadly considered deflationary.

• Fox Business’ Jackie DeAngelis falsely claimed that if Harris “raises the corporate tax rate to 28%, almost 150,000 people right off the bat are going to lose their jobs.” DeAngelis added: “Ultimately the corporations aren't these big, bad evil entities.” [Fox News, Fox & Friends, 8/20/24]
• Fox & Friends co-host Lawrence Jones claimed that “you’re gonna have massive layoffs” if Harris raises the corporate tax rate to 28%. Co-host Brian Kilmeade defended the Trump-era rate, saying, “Corporations have people in it,” and claiming that it would make the U.S. uncompetitive with European countries with lower corporate tax rates. [Fox News, Fox & Friends, 8/20/24]
• Fox Business host Charles Payne: Harris wants to “go to war with corporate America.” Payne then proclaimed Harris will “make the lives of workers harsher,” adding that “there will be fewer jobs.” [Fox News, The Faulkner Focus, 8/20/24]
• Wash. Times columnist and Trump campaign staffer Tim Murtaugh: “She wants to tax job creators at a higher rate than Chinese communists do.” Murtaugh added: “Who do you think will pay for the tax increase? Do you suppose maybe it’s passed on to consumers like always? Harris is dangerous.” [Twitter/X, 8/20/24]
• Fox contributor Jason Chaffetz: “Do you think a 30% increase in the corporate tax rate will increase the cost of your life? Yes, it will. Everything will cost more. That’s VP Harris’ plan. Believe her.” [Twitter/X, 8/20/24]
• Right-wing commentator Bill Mitchell: Raising the corporate tax rate is inflationary. Mitchell posted that “corporations will pass costs onto consumers.” [Twitter/X, 8/20/24]