Former President Donald Trump last week spoke to CEOs about cutting the corporate income tax rate. President Joe Biden, in contrast, wants to increase the rate.

Because Trump’s announcement came before the Business Roundtable, it’s being interpreted as pandering to corporate America. That’s fair enough.

But Biden’s counter — a higher corporate tax rate — should not be taken as some broadside against the powerful. Instead, Biden’s tax policy of higher rates with more exemptions is best understood as a way to enrich and empower the insiders.

Corporate income taxes provide less than 9.5% of all federal revenues, and they are one of the least efficient ways for the government to get money.

First of all, corporations aren’t people. They never enjoy revenues, they simply pass along their revenues to employees, investors, and creditors.

As a result, taxing corporations means taxing employees, investors, creditors, and customers — mostly workers and consumers.

The Tax Foundation reported recently:

“The economic evidence suggests that in the long run, workers and consumers, rather than shareholders, bear a sizable share of the corporate tax burden….

“In a large study of German municipalities over a 20-year period, Fuest et al. (2018) find that slightly more than half of the corporate tax burden falls on workers.”

Higher corporate income tax rates harm the economy — reduce the GDP — by creating bad incentives. The pursuit of profit involves balancing all sorts of considerations, including financing, consumer demand, and the labor market. Taxes are one such consideration.

Companies, among other factors, make spending and investing decisions based on how these activities will affect their tax bill. The more that companies think about gaming the tax code, the less they think about giving consumers what they want. So the higher the tax rates, the less efficient the economy.

But higher corporate tax rates serve a real purpose, and if you follow closely Biden’s tax policies, you can see them. Consider this column in the New York Times arguing that, for better or worse, Biden isn’t really a tax hiker:

“The president’s enacted tax cuts include incentives for companies to manufacture and install solar panels, wind turbines and other technologies meant to reduce fossil fuel emissions, which are a centerpiece of the climate law he signed in 2022….

“Mr. Biden gave tax breaks to semiconductor factories as well, as part of a bipartisan advanced manufacturing bill he signed earlier that year. The president also included temporary tax breaks for individuals and certain businesses in his 2021 economic stimulus bill, the American Rescue Plan….”

Chris Edwards at the Cato Institute reports that Biden nearly doubled “tax expenditures.”

In other words, Biden wants higher rates and more carve-outs.

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Higher tax rates and more complexity mean greater government control over corporate behavior. That means politicians and bureaucrats have more power. It also creates more jobs for political and policy insiders hired by corporations to game the increasingly complex tax code.

So maybe Trump, in proposing lower rates, is giving a gift to investors, but he’s also giving a gift to consumers and employees. Biden, in proposing higher rates and more complexity, is giving a gift to Beltway insiders.