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April 12, 2021

How Would Tax Increases Impact U.S. Economy And Workers?

The National Association of Manufacturers (NAM) and economists from Rice University have tried to answer that question in a new study.

They determined that raising corporate tax rate to 28 percent, increasing the top marginal personal income tax rate, repealing the 20 percent pass-through deduction, and eliminating certain expensing provisions would have large negative effects for the economy.

These include:

  • One million jobs lost within the first two years of implementation;
  • A decline in gross domestic product (GDP) totaling $117 billion by 2023;
  • An $80 billion decline in ordinary capital, or investments in equipment and structures by 2023;
  • An average annual reduction in employment of 600,000 jobs each year over 10 years;
  • A 0.6 percent decline in real wages over the long-term; and
  • A 0.6 percent decline in total labor compensation, including wages and benefits, over the near- and long-term.

Read more here and weigh in with members of Congress about tax policy using this portal.