North Carolina is projected to rank No. 12 in the nation for the largest economic loss under Kamala Harris’ proposed corporate tax increase, according to a new report from the Tax Foundation. The individual worker in North Carolina is projected to lose more than $200 per year under the corporate tax increase.
As part of her policy platform rolled out in August, Harris intends to increase the federal corporate tax from 21% to 28% if elected. The 21% rate was set by Donald Trump’s 2017 Tax Cuts and Jobs Act.
The report estiminates that in North Carolina, the average wage loss per year per employee for ten years ranges between $221 and $530. North Carolina would rank No. 24 in the nation for wage loss per employee.
The Harris proposal’s total economic impact on the state would be a loss of $907 million to $2176 billion annually for ten years.
“The projected loss in aggregate wages is $1.54 billion per year, which ranks 12th largest in the nation,” Joseph Harris, Fiscal Policy Analyst for the John Locke Foundation, told the Carolina Journal. This works out to $375 per worker, with state workers numbering between 4 and 5 million.
The proposal comes as many families struggle to make ends meet and face food insecurity amid grocery prices that are up more than 20% since 2021.
Harris also plans to expand the child tax credit from $2,000 up to as much as $3,600. Additionally, she is taking a page out of Trump’s playbook by promising to end the tax on tips, according to CNN. Harris plans to use revenue from raising the corporate income tax to fund these policies.
While Harris plans to raise corporate taxes, Trump plan includes a cut to 15% for domestic producers. He has also stated that he is considering expanding the child tax credit to a $5,000 universal credit.
“Smart tax policy takes into account how policy changes impact real people. Understanding who bears the burden of the corporate tax and the effects of a higher rate are essential to sound policymaking,” wrote Daniel Bunn, President and CEO of the Tax Foundation. “A competitive corporate rate would help our tax code raise revenue without standing in the way of individuals looking for greater opportunities—for themselves, their families, their innovations, and their savings.”
ECONOMIC IMPACT
Harris’s plan would lower the GDP by 0.61 percent, wages by 0.52 percent, and jobs by 125,000 while raising $760 billion in corporate tax dollars over ten years. Trump’s tax cut would increase the GDP by 0.44 percent, wages by 0.37 percent, and jobs by 93,000, according to data from the Tax Foundation.
“The Harris campaign has marketed this tax hike as a mechanism to ensure that corporations pay their fair share in taxes; however, this tax increase would primarily burden workers and consumers,” said Joseph Harris. “The higher tax rate would negatively affect workers through slower wage growth and consumers through higher prices.”