If a series of proposed changes to the tax system, including a 25% corporate tax rate, were passed, 1 million jobs would be lost in the first two years, according to a new NAM study.

The data: The analysis—an update to NAM research released in April—considered a range of tax proposals that would change the tax system put into place by the 2017 Tax Cuts and Jobs Act. These included:

• A corporate tax increase from 21% to 25%;
• A reinstatement of the corporate alternative minimum tax;
• An immediate end to expensing of most investments in depreciable assets, to be replaced by the modified accelerated cost recovery system;
• An immediate repeal of the 20% deduction for certain pass-through business income;
• The taxation of capital gains and dividends at the same rate as ordinary income for taxpayers with incomes above $1 million, and the taxation of unrealized capital gains at death; and
• An immediate increase in the top individual tax rate from 37% to 39.6%.

Other findings: Along with the job losses, the NAM’s study also found that the changes would lower GDP by $107 billion in 2023, by $169 billion in 2026 and by $89 billion in 2031.

• Ordinary capital, or investments in equipment and structures, would be $70 billion less in 2023 and $70 billion and $51 billion less in 2026 and 2031, respectively.

Our view: NAM President and CEO Jay Timmons said, “Manufacturers are encouraged by the bipartisan negotiations continuing this week. Infrastructure investment and retaining competitive tax policies are a win–win for America. But there are some still advocating for increasing taxes on manufacturers—just not quite as much as the 28% proposed originally by President Biden. They might mean well, but that doesn’t change the fact that America will still lose jobs and investment in our communities at a time when manufacturers are working to build the post-pandemic world.”