A proposal by the Biden administration to raise the corporate income tax rate to 28% from 21% would increase the federal-state combined tax rate to 32.34% — the highest level in the Organization for Economic Cooperation and Development (OECD), according to a new analysis by the Tax Foundation.
The study also found that the higher corporate tax would undermine long-run economic output by 0.8%, eliminate 159,000 jobs and reduce wages by 0.7%, while increasing the cost of investment and harming U.S. competitiveness.
New Jersey’s corporate income tax rate of 11.5% is the highest in the nation. It occurred after Gov. Phil Murphy retroactively increased and extended the state’s 2.5% surcharge on corporate income exceeding $1 million for tax years 2020 through 2023.
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