Federal tax policy shapes the economic foundation of every American community. When businesses can plan for consistent, competitive tax rates, they make decisions that ripple through our entire economy, adding jobs, raising wages and expanding services. This was underscored in 2017, when President Donald Trump and Republicans in Congress lowered the business tax rate from 35 percent to 21 percent. The policy change unleashed an economic resurgence, as job creators and entrepreneurs were finally empowered to compete globally and invest in their workforce and local communities.

That’s why maintaining the current 21 percent business tax rate is so important. As Congress debates comprehensive tax reform, ensuring that these businesses can thrive in a global environment must remain a central consideration.

American businesses are navigating unprecedented challenges. Supply chain disruptions continue to plague industries. Labor markets remain tight, with wage pressures pushing operational costs higher. And inflation has eroded purchasing power. The last thing businesses need is tax uncertainty.

The data speaks clearly. When the corporate tax rate was reduced from 35 percent to 21 percent, we witnessed historic benefits throughout our economy. Real wages grew nearly 5 percent in the first two years, representing the fastest growth rate in 20 years. Domestic capital investment increased by 20 percent, according to a study from the National Bureau of Economic Research. Additionally, an estimated 23 million small businesses were able to use “their tax savings to boost investment, hire more workers, and raise employee wages.”

These aren’t abstract statistics. They represent real opportunities for American workers, families and the communities they live and work in.

Even with the current 21 percent rate, America’s effective corporate tax rate (combining federal and state taxes) averages 25.8 percent. That is still higher than the OECD average of 23.5 percent. Any increase would undercut competitiveness, incentivize offshoring and lead to a return of corporate inversions. Other nations are continuing to reduce their rates to attract investment.

We cannot afford to move in the opposite direction.

Critics argue that corporations should “pay their fair share,” but this perspective misunderstands how corporate taxes function in our economy. When businesses face higher tax bills, everyday Americans ultimately shoulder the cost. In fact, the Congressional Budget Office estimates that workers bear as much as 70 percent of the corporate tax burden. 

Stability in tax policy creates the confidence businesses need for long-term planning and investment. Capital investments, whether in new manufacturing facilities, research and development, or workforce training, require years to implement and realize returns. Companies cannot make these commitments amid constant tax fluctuations. The predictability of the current rate has enabled businesses to make forward-looking investments rather than focusing on tax avoidance strategies.

In addition to the investments in their workforce and core business, we both know that when there is a healthy corporate environment, that means companies have funds to invest back into their communities in the form of employee scholarships, preventive medical care, local nonprofit assistance, and let’s not forget the little league sponsorships!

Small businesses are particularly vulnerable to corporate tax changes. While many operate as pass-through entities rather than corporations, they exist within supply chains dominated by larger companies. When major corporations face higher taxes, they often offset costs by squeezing suppliers, typically smaller businesses with thinner margins and fewer resources to adapt.

Consider your local heating and cooling company. With material costs rising due to inflation and supply chain disruptions, and labor expenses increasing, their margins are already compressed. A corporate tax increase would force these small businesses to either absorb costs they cannot afford or pass them on to consumers — ultimately harming the very families advocates for higher rates claim to protect.

The current debate occurs against a backdrop of mounting national debt, now exceeding $35 trillion. Addressing this challenge requires fiscal discipline, but a corporate tax increase would yield relatively modest revenue while potentially stifling the economic growth needed to generate broader tax receipts. A more prudent approach would be to close specific loopholes while preserving the globally competitive 21 percent corporate tax rate. 

As President Trump and Congress work to finalize tax legislation, they must recognize that maintaining the current corporate tax rate isn’t about favoring big business, it’s about creating conditions for American enterprises of all sizes to thrive in a challenging global environment. A competitive business tax rate will power America’s golden age, ensuring job creation, wage growth, and economic opportunity and prosperity for millions of American families.

Saxby Chambliss represented Georgia in the U.S. Senate as a Republican. Blanche Lincoln represented Arkansas in the U.S. Senate as a Democrat and currently serves as an adviser to the RATE Coalition.