President Joe Biden has released his budget for fiscal 2024. He is proposing trillions of dollars of tax increases, including raising the corporate tax rate from 21% to 28%.

With inflation still high and the economy struggling, raising taxes would be a major economic mistake. Economic research has shown that increasing the corporate tax rate is the most damaging to economic growth, resulting in lower wages, higher prices, and fewer jobs. While Biden keeps claiming his tax increase would only affect the largest corporations, his corporate tax rate increase would hit small businesses.

Although many small businesses are set up as pass-through entities that pay individual income taxes, others are structured as C-corporations, subject to corporate income tax. More than 1 million are small companies with business receipts below $500,000, and most of them have fewer than 20 employees. None of them are the big corporations Biden says are not paying their fair share.

Biden’s tax increase would increase the combined federal-state tax rate to 32.8%, one of the highest in the industrialized world, and much higher than the average Organization for Economic Cooperation and Development rate of 22.8%. This high U.S. rate would put U.S. firms at a major competitive disadvantage with China, in particular. Why would we want to give China such an advantage?

Fortunately, House Republicans are likely to prevent Biden from carrying his rhetoric into law.

Bruce Thompson was a U.S. Senate aide, assistant secretary of Treasury for legislative affairs, and the director of government relations for Merrill Lynch for 22 years.