Biden’s tax increase could cause major job losses and economic harm: Study

The study, conducted by Rice University economists John W. Diamond and George R. Zodrow, discovered that if the proposed policies went into effect, "...the increased corporate tax rate, would result in less economic activity and one million jobs lost in the first two years."

The infrastructure plan proposed, called the American Jobs Plan, would cost taxpayers $2.25 trillion. To pay for it, Biden has proposed an increase in the corporate tax to 28 percent, as well as increase the top individual tax rate to 39.6 percent, among other changes.

The study claims that hours worked by employees would fall, equating to lost jobs over years to come.

"Total employment, measured by hours worked, would fall by 0.7% initially before moderating. The reduction in hours worked would be equivalent to an employment decline of approximately 1 million full-time jobs in 2023. Those jobs would still be gone in 2026 before stabilizing," the study reads.

"The average annual reduction in employment would be equivalent to a loss of 600,000 jobs each year over 10 years." It also says that the country's GDP would fall, as well as the real wages of workers.

By 2023, GDP would be down by $117 billion, by $190 billion in 2026 and by $119 billion in 2031," it says. "Real wages would fall by 0.6% in the long run, and total labor compensation, including wages and benefits, would decline by 0.6% initially before falling by 0.3% after 10 years. In the long run, total compensation would also decline by 0.6%."

"Ordinary capital, or investments in equipment and structures, would be $80 billion less in 2023 and $83 billion and $66 billion less in 2026 and 2031, respectively," it continues.

"Investments in intangibles, or 'firm-specific capital,' are highly mobile and more sensitive to marginal tax rate changes. Such investments would fall 2.7% by year two and would be down a total of 3.8% by year five."

The NAM had previously approved of Biden's plan, but has since come out against the plan to pay for it.

"Achieving our shared goals will be the result of debate, discussion and collaboration with the administration and both parties in Congress," said CEO Jay Timmons in a statement.

“...to make sure that we preserve the predictability and stability in the tax code that keeps equipment manufacturers competitive and drives job creation and good wages,” he continued.

When asked on Wednesday whether he would consider lowering the proposed tax rate, Biden said "I'm willing to listen to that."