Summary: PWBM analyzed an increase in the corporate income tax rate to 28 percent, from its current level of 21 percent, as part of the Biden presidential campaign platform. Here, we analyze the budgetary and macroeconomic effects of corporate income tax increases to 25 percent, 28 percent, and 30 percent. This estimate will be updated as additional data becomes available on the state of the COVID-19 pandemic and the economy.

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Table 1. Conventional Revenue Estimate by Proposed Rate, Fiscal Years 2022-2031

Billions of Dollars, Change from Current-Law Baseline

Proposed Corporate Tax Rate	2022	2023	2024	2025	2026	2027	2028	2029	2030	2031	2022-2031
25%	37.8	53.2	55.3	57.5	60.1	64.6	65.1	64.5	65.4	68.7	592.3
28%	65.6	92.4	96.1	99.8	104.5	112.3	113.1	111.9	113.6	119.3	1028.6
30%	83.9	118.1	122.8	127.6	133.6	143.6	144.7	143.2	145.3	152.6	1315.3

Table 2. Economic Effects by Proposed Rate Corporate Tax Rate

Percent change relative to baseline

Proposed Corporate Tax Rate	Year	Output	Capital Stock	Average Hourly Wage	Average Hours Worked	Government Debt
25%	2031	0.68	1.85	0.59	0.09	-1.01
	2040	0.96	2.66	0.73	0.23	-2.73
	2050	1.23	3.53	1.13	0.1	-3.87
28%	2031	1.2	3.3	1.04	0.16	-1.44
	2040	1.67	4.72	1.39	0.27	-4.47
	2050	2.17	6.28	2.01	0.15	-6.52
30%	2031	1.56	4.31	1.36	0.2	-1.7
	2040	2.16	6.18	1.85	0.31	-5.63
	2050	2.82	8.2	2.6	0.22	-8.27

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