Key Takeaways

Congressional Republicans are pushing tax proposals that would significantly reduce taxes for corporations by slashing the corporate tax rate from 21 percent to 15 percent. Their tax plan, including these proposed tax cuts, would be a major windfall for the ultrawealthy and corporations while widening the racial wealth divide and costing the country more than $4.5 trillion over 10 years.1 Lowering the corporate tax rate will cost the country at least $522 billion over 10 years, money that should be invested in public goods that benefit us all, not further enriching the already wealthy.2

These tax cuts for corporations will come at the expense of hardworking families. When policymakers make changes that reduce tax revenues significantly, the government must find other revenues or cut spending. Republicans in Congress plan to pay for corporate tax giveaways in part by cutting over $1 trillion in funding for public programs, including Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and financial assistance for higher education.3 For example, the current budget plan could lead to $880 billion in cuts to health care programs, including Medicaid, which would result in 36 million people losing health care coverage.4

A strong corporate tax system with adequate enforcement is essential to creating a fairer tax code that distributes resources more equitably.

Economic hardship plagues millions of hardworking families who face challenges like high costs from inflation and corporate greed. A strong corporate tax system with adequate enforcement is essential to creating a fairer tax code that distributes resources more equitably and raises sufficient revenues to support both the public good and relief for everyday people—particularly Black and brown people who have borne the brunt of generations of economic exclusion.

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Background

Why is there a big focus on corporate taxation right now?

During his first administration, President Trump and Republican members of Congress cut taxes for corporations and wealthy households in a major tax reform bill called the “Tax Cuts and Jobs Act” (TCJA) that did very little for households with low or moderate incomes. With some elements of that bill set to expire at the end of 2025, President Trump and Republican lawmakers are seizing the opportunity to prioritize even deeper tax cuts for profitable corporations.

Corporate tax cuts will increase corporate profits and enrich executives, widen income inequality, and cost the country more than half a trillion dollars in revenue that should be invested in public goods

The TCJA lowered the corporate tax rate from 35 to 21 percent, which is the lowest it has been for generations.5 Yet President Trump and congressional Republicans now propose lowering the corporate tax rate to 15 percent and are considering giving corporations additional tax deductions. Corporate tax cuts will increase corporate profits and enrich executives, widen income inequality, and cost the country more than half a trillion dollars in revenue that should be invested in public goods and services like health care, education, and child care.6

Read more about corporate tax policy and how a fairer tax code could fund programs that benefit the public good

  • 1Catie Edmondson, Andrew Duehren, Maya C. Miller, and Robert Jimison. (February 25, 2025). House Passes G.O.P. Budget Teeing Up Enormous Tax and Spending Cuts. The New York Times. https://www.nytimes.com/2025/02/25/us/politics/mike-johnson-budget-resolution-vote.html
  • 2Draft Options for Cost Cuts for Tax Bill. (January 23, 2025). The New York Times. https://static01.nyt.com/newsgraphics/documenttools/28cb85c5ed1f6c52/44e83eb4-full.pdf (leaked draft that top Republicans were circulating that The New York Times gained access to)
  • 3Center on Budget and Policy Priorities. (2025). House Republican Budget Would Mean Higher Costs, Less Help for Families, More Tax Windfalls for Wealthy. https://www.cbpp.org/press/statements/house-republican-budget-would-mean-higher-costs-less-help-for-families-more-tax; Establishing the congressional budget for the United States Government for fiscal year 2025 and setting forth the appropriate budgetary levels for fiscal years 2026 through 2034, H.Con.Res.14, 119th Congress (2025-2026), https://docs.house.gov/meetings/BU/BU00/20250213/117894/BILLS-119NAih.pdf
  • 4Gideon Lukens and Elizabeth Zhang. (January 7, 2025). Medicaid Per Capita Cap Would Harm Millions of People by Forcing Deep Cuts and Shifting Costs to States. Center on Budget and Policy Priorities. https://www.cbpp.org/research/health/medicaid-per-capita-cap-would-harm-millions-of-people-by-forcing-deep-cuts-and; Center on Budget and Policy Priorities. (2025). House Republican Budget Would Mean Higher Costs, Less Help for Families, More Tax Windfalls for Wealthy. https://www.cbpp.org/press/statements/house-republican-budget-would-mean-higher-costs-less-help-for-families-more-tax
  • 5Matthew Gardner, Michael Ettlinger, Steve Wamhoff, and Spandan Marasini. (May 2, 2024).Corporate Taxes Before and After the Trump Tax Law. Institute on Taxation and Economic Policy. https://itep.org/corporate-taxes-before-and-after-the-trump-tax-law
  • 6Draft Options for Cost Cuts for Tax Bill. (January 23, 2025). The New York Times. https://static01.nyt.com/newsgraphics/documenttools/28cb85c5ed1f6c52/44e83eb4-full.pdf (Leaked draft that top Republicans were circulating that The New York Times gained access to).