What Corporate Tax Rate Hikes Could Mean for Stocks

President Joe Biden has unveiled an infrastructure plan to spend around $2 trillion over the next 10 years and plans to pay for it with corporate tax increases--raising around $2 trillion over the next 15 years. The plan proposes increasing the corporate tax rate to 28% from the current 21%, which is still lower than the 35% before the Tax Cuts and Jobs Act of 2017.

While there are other plausible sources of revenue, these will likely be needed for other spending priorities outlined in the bill, so we believe there is a high probability that Congress will raise taxes on corporations this year, effective in 2022. We laid out why we think this is very likely in a previous article.

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