The 28% corporate tax rate is a proposal, made in the 2024 Harris platform and in Biden administration budgets, to raise the federal rate on C-corporation profit from 21% to 28%. On $1,000,000 of taxable income, it moves the federal bill from $210,000 to $280,000, a 33% increase.
In 2024, business owners asked a blunt question: what happens if Kamala wins? The sharpest answer sat in one line of her platform. The federal corporate tax rate would rise from 21% to 28%, a figure that had already appeared in Biden administration budget proposals. Campaigns described it as a tax on large corporations. The owners who asked the question understood something the talking points skipped: a corporate rate reaches every C corporation, and its effects travel to suppliers, customers, employees, and shareholders who never file a corporate return.
The proposal was not enacted. The question behind it did not go away. Tax rates are set by Congress, they have moved before, and any future Congress can move them again. A capital plan that only works at today's tax rate is a plan with an unpriced risk inside it.
If you came here for a tax advisor's view of a Harris White House, the answer starts with the numbers an advisor would run first and the questions to bring to your own. At BetterWealth, we have structured more than 2,000 whole life policies for entrepreneurs, business owners, and high-income earners across all 50 states. We are not tax advisors, and nothing here replaces your CPA. What we see across those policies is how tax changes reach the decisions business owners make about capital: what to keep, where to hold it, and which deals still clear their cost of money after tax. That last question sits at the center of The And Asset, and a higher tax rate changes the answer.
- The proposal would raise the federal corporate rate from 21% to 28%, a seven-point increase on C-corporation taxable income.
- Every $1,000,000 of C-corp taxable income would owe $70,000 more in federal tax, a 33% larger bill.
- S corporations and most LLCs are not taxed at the corporate rate, but their owners still feel it indirectly.
- A higher tax rate shrinks after-tax returns, so fewer projects clear the cost of the capital used to fund them.
- Whole life insurance does not lower a corporate tax bill; it holds capital in a bucket taxed differently.
- The And Asset rule tightens under higher taxes: only borrow when the after-tax return beats the loan cost.
01 / The ProblemWhy a Corporate Rate Proposal Reaches Owners Who Never Expected It To
A corporate rate proposal reaches far beyond the large companies campaigns name, because the rate applies to every C corporation regardless of size. A dental practice organized as a C corporation, a family manufacturing company, and a public conglomerate all face the same statutory rate on taxable income. There is no small-business carve-out in a flat corporate rate.
The problem for a business owner is planning, not politics. Capital decisions run on multi-year horizons. You buy equipment, sign leases, hire, and commit to projects based on what you expect to keep after tax. A seven-point change in the rate you pay rewrites that expectation for every year it stays in place, and it does so on a timeline set by elections rather than by your business.
A 28% rate is sold as a tax on large corporations. For a C corporation of any size, it is a tax on you. A flat rate has no small-business carve-out.
02 / The ProposalWhat Did the Harris Plan Propose for the Corporate Tax Rate?
The Harris plan proposed raising the federal corporate tax rate from 21% to 28%. It was one part of a broader revenue package, and the same 28% figure appeared in Biden administration budget proposals before it appeared in the 2024 campaign. Treasury's annual revenue proposals, often called the Green Book, lay out the details and estimates for each budget's proposals.
Harris did not win the election, and Congress did not enact the 28% rate. That makes this page a record of a specific proposal and a working model for a recurring one. When a figure shows up in multiple budgets and a presidential platform, it has a constituency, and it can return in the next budget cycle or the next campaign.
Pass-Through Owners Are Not Off the Hook
S corporations and most LLCs pass their income through to owners, who pay tax at individual rates. A corporate rate change does not touch that income directly. It still reaches pass-through owners in three ways: the C-corporation suppliers and customers they depend on face higher costs, the lenders and landlords they deal with adjust, and any C-corporation stock they own in a brokerage or retirement account earns less after tax. Separate proposals targeting individual rates, capital gains, or high-net-worth households are a different question, and they deserve their own analysis rather than being blended into the corporate rate.
A pass-through owner never files at 28%, and still pays it through suppliers, lenders, and portfolios.
03 / The CostWhat Would a 28% Corporate Tax Rate Cost a Business?
A 28% corporate rate costs $70,000 in additional federal tax for every $1,000,000 of C-corporation taxable income. At 21%, $1,000,000 of taxable income owes $210,000 and leaves $790,000. At 28%, the same income owes $280,000 and leaves $720,000. The rate rises by seven percentage points. The tax bill rises by 33%.
Smaller companies feel the same proportion. A C corporation with $437,000 of taxable income owes $91,770 at 21% and $122,360 at 28%, a difference of $30,590 every year the rate holds. Over a decade, that is more than $305,000 that never gets reinvested, retained as reserves, or paid to the owner.
The second-order cost compounds the first. C-corporation profit that reaches the owner as a dividend is taxed again at the shareholder level. A higher corporate rate shrinks the pool before that second layer applies, so the owner's take from each dollar of corporate profit falls even if individual rates never change.
04 / IncidenceWho Actually Pays a Corporate Tax Increase?
People pay a corporate tax increase, not the legal entity. A corporation is a legal structure. Every dollar of added tax comes out of the pocket of someone connected to it: shareholders through lower after-tax profit, workers through slower wage growth, or customers through higher prices. Economists disagree about the exact split, and the split likely varies by industry and by how much pricing power a company has.
This is why owners well below the scale campaigns describe still pay attention. A distributor that buys from C-corporation manufacturers may see input prices rise. A real estate investor whose tenants are C corporations may see slower rent growth. A business owner with a 401(k) invested in index funds owns thousands of C corporations, each earning less after tax. The statutory target of a tax and the people who bear it are rarely the same group.
A tax described as reaching "only corporations" reaches every shareholder, employee, and customer those corporations have.
05 / The FrameworkHow Does The And Asset Fit a World of Changing Tax Rates?
The And Asset fits a world of changing tax rates by holding part of a business owner's capital in a bucket taxed under different rules than corporate profit and individual income, and by forcing every deployment of that capital through an after-tax hurdle. It does not reduce the tax a corporation owes. It changes where some of your capital sits and how you decide when to use it.
The foundation comes from Nelson Nash, who pioneered the idea of using whole life insurance as a personal banking system in Becoming Your Own Banker. His insight holds: you either lose money paying interest to outside lenders, or you lose money to the opportunity cost of capital sitting idle. The And Asset shares roots with IBC but operates on different principles.
Where IBC Ends and The And Asset Begins
IBC says you can use a whole life policy as a personal banking system for any purchase. The And Asset says you only deploy capital from the policy when the borrowed dollars produce a return greater than the carrier's loan cost, because anything less is an expensive way to spend money. Under a higher tax rate, that test gets stricter. The return that counts is the one left after tax, and a seven-point rate increase can push a deal that cleared the loan cost at 21% below it at 28%.
The same discipline corrects a common pitch. Many IBC marketers say you are paying yourself interest. You are not. The interest on a policy loan goes to the carrier. Your return is what the deployed capital earns elsewhere while the policy keeps compounding at the dividend rate net of mortality and expense charges.
06 / How to PlanHow to Stress-Test Your Capital Plan Against a Higher Corporate Tax Rate
Stress-testing a capital plan against a higher corporate rate takes six steps, and none of them require predicting an election. The goal is to know, before any bill moves, which of your decisions depend on today's rate.
- Map where your profit is taxed. List each entity you own and how it is taxed. A C corporation pays the corporate rate. S corporations and most LLCs pass income through to owners, who pay individual rates.
- Rerun last year at 28%. Apply 28% instead of 21% to last year's C-corp taxable income. Every $1,000,000 of taxable income produces $70,000 more federal tax and $70,000 less to reinvest or distribute.
- Recompute your after-tax hurdle. For every planned deployment of capital, compare the after-tax return, not the pre-tax return, against the cost of the capital you are using. Cut any deal that only clears the hurdle at today's rate.
- Diversify how your reserves are taxed. Hold reserves across buckets with different tax treatment so a single rate change reaches only part of your capital.
- Structure any policy correctly. If a whole life policy is one of those buckets, design it with a minimal base premium and a heavy paid-up additions rider, keep it under the MEC limit, and keep it in force so policy loans stay non-taxable under current law.
- Review annually with your CPA. Revisit the model each year and whenever a tax proposal gains traction in Congress. Do not restructure a business on a proposal alone.
A policy built for this role is slow to start. Cash value trails cumulative premium through the early years, and a healthy insured typically reaches break-even around year five. A policy funded today is capital for the next decade of tax regimes, not a hedge against next year's bill.
This Fits a Specific Business Owner Doing Specific Things
It Fits You If
- You run a profitable business or deploy capital regularly
- You have a 10+ year horizon for the capital you set aside
- You can name uses for capital that beat the loan cost after tax
- You want reserves that do not all move with one tax rate
It Does Not Fit You If
- You want a tool to cut this year's tax bill
- You need the cash back within a few years
- You are carrying high-interest debt
- You cannot identify a productive use for borrowed dollars
If you are in the first column, a 30-minute conversation will tell you whether a policy belongs in your capital structure. If you are in the second, we will tell you that too.
Book a Discovery Call07 / The MathDoes the Deal Still Clear the Loan Cost After Tax?
A deal funded with borrowed policy capital must clear the carrier's loan cost on an after-tax basis, or you should not borrow. Loan rates vary by carrier and rate environment. At the time of writing, many carriers fall in the 5 to 6% range, so this section uses 5.75% as an illustration, not a quote.
Take $143,700 borrowed at an illustrative 5.75%. The first-year loan cost is $8,263. Now put that capital into a C-corporation project yielding 7.9% before tax, or $11,352 a year. At a 21% corporate rate, $8,968 is left after tax, which clears the loan cost by $705. At 28%, $8,173 is left, which falls $90 short. Same deal, same loan, same business. The tax rate decided whether it worked.
One omission matters most. Because the owner owes the loan personally, the project's return has to survive both corporate tax and dividend tax before it reaches them. That second layer widens the shortfall at both rates, so the 21% pass is weaker than it looks. This simplified comparison also ignores depreciation and timing, and a CPA should model the full picture. The direction does not change with the detail. Higher tax rates raise the bar, and marginal deals are the first to fall below it.
If the after-tax return does not beat the loan rate, do not borrow.
08 / The PitchWhere People Get This Wrong
People get this wrong in two directions, and both cost money. The first is the owner who ignores tax proposals entirely and builds every projection on the current rate. The second is the agent who uses a tax headline to sell a policy as protection from an election.
Marketers have ruined the way this strategy should be explained, and tax-season pitches are some of the worst examples. A whole life policy does not shield a corporation's profit from a corporate tax increase. Premiums on a personally owned policy are paid with after-tax dollars. The tax advantages that exist under current law are specific: cash value grows tax-deferred, and policy loans are not taxable income while the policy stays in force and is not a Modified Endowment Contract. If an unpaid loan grows past the cash value and the policy lapses, the gain can become taxable. The advantage depends on design and on your discipline in repaying.
Anyone selling you a policy as a way to beat an election is selling the headline. The math still has to work after tax.
The Frameworks Behind 2,000+ Policies, in One Place
The And Asset Vault holds the calculators, design frameworks, and structuring decisions we use when we model whether a policy belongs in a business owner's capital plan. Free, email-gated, no spam.
Open the Vault09 / The TradeoffsWhat Are the Benefits and Real Tradeoffs?
The benefit of holding part of your capital in a properly structured policy is separation: its growth and access follow rules that do not move with the corporate rate. The carrier cannot call a policy loan or freeze access the way a bank can pull a credit line, and you set the repayment schedule. That flexibility carries a limit. An unpaid loan that grows past cash value can lapse the policy and trigger tax, so a repayment plan is part of the design.
The tradeoffs are real. Early cash value trails what you put in, with break-even typically around year five for a healthy insured. The policy has internal costs, and growth is the dividend net of mortality and expense charges, not the headline dividend rate. Dividends are declared annually and are not guaranteed. Current tax treatment is also set by Congress, the same body that sets corporate rates, so no bucket is permanently immune to change. Diversifying tax treatment spreads the risk. It does not remove it.
10 / Head to HeadHow Each Capital Bucket Responds to a Tax Rate Change
Each place a business owner holds capital responds to a tax change differently. The table compares five common buckets on exposure to a corporate rate increase, exposure to future individual rate changes, and access.
| Bucket | Corporate Rate Exposure | Individual Rate Exposure | Access |
|---|---|---|---|
| C-Corp Retained Earnings | Direct: $210,000 to $280,000 of tax per $1M of profit | Taxed again when distributed as dividends | Controlled by the company |
| Pass-Through Business Income | None directly; indirect through suppliers and customers | Direct: taxed at the owner's individual rates | Distributions at the owner's discretion |
| 401(k) | Indirect through C-corp holdings | Deferred now, taxed as ordinary income at future rates | Restricted before 59½ (penalty plus tax) |
| Taxable Brokerage | Indirect through C-corp holdings | Dividends and gains taxed as realized | Liquid, settles in days |
| Properly Structured Whole Life | None directly; indirect through the carrier's own taxes and dividend scale | Tax-deferred growth; loans not taxable income under current law if not a MEC and in force | Policy loans the carrier cannot call, but an unpaid loan that grows past cash value can lapse the policy and trigger tax |
C-corp retained earnings. This bucket takes the full hit from a rate increase: $70,000 more per $1,000,000 of taxable income. Money that stays inside the company is taxed once at the corporate rate, and again at the shareholder level if it is later paid out as a dividend.
Pass-through business income. S corporations and most LLCs sit outside the corporate rate. Their exposure is to individual rate changes, which is a separate political question with its own proposals.
401(k). Growth is tax-deferred, and withdrawals are taxed as ordinary income at whatever rates apply when you take them. The account is regulated, and access before 59½ is restricted, generally with a penalty plus tax.
Taxable brokerage. Fully liquid, and fully exposed to both corporate earnings pressure on the companies you own and individual taxes on your dividends and gains.
Properly structured whole life. Growth is tax-deferred and loans are not taxable income under current law, provided the policy stays in force and under the MEC limit. The cost of that treatment is slow early cash value and internal policy charges.
A Composite: The C-Corp Owner Who Tested the Deal at 28%
Consider a 46-year-old owner of a precision machining company organized as a C corporation, preferred non-tobacco. The owner funds a personally owned whole life policy at $38,400 a year on a 30/70 base/PUA split: $11,520 of base premium and $26,880 into the paid-up additions rider. This is a representative composite, not a single named client.
In year seven, the company needs a new machining line. The owner borrows $143,700 against the policy at an illustrative 5.75% loan rate. Interest on the full balance would be $8,263 a year, a ceiling; because the loan amortizes on the note schedule below, first-year interest is about $8,016. With the company's CPA, the owner lends that $143,700 to the corporation on a written note at the same rate, and the company buys the line. The policy keeps compounding on its full cash value the entire time. At the same rate in and out, the note itself earns the owner nothing; the owner's real return comes through their equity in the company, where the line's 16.9% yield lands.
The note carries tax costs this example leaves out. Note interest is taxable income to the owner, and the carrier interest the owner pays is personal and generally not deductible. The corporation's deduction for its note interest is a planning assumption, not a promised write-off: business interest deduction rules have limits, so confirm with your CPA.
The line adds $24,285 a year of pre-tax margin, a 16.9% yield on the capital. Before approving it, the owner runs the after-tax test at both rates. At 21%, $19,185 is left after corporate tax. At 28%, $17,485 is left, a 12.2% after-tax yield that still clears about $8,016 of first-year loan interest by $9,469. The deal survives the higher rate.
The company repays the note at $1,456 a month over 134 months, $17,472 a year, which the line's after-tax margin covers at 28% with almost nothing to spare. The owner uses each note payment to repay the policy loan on the same schedule. A second project the owner considered, yielding 7.9% before tax, cleared the loan cost at 21% and missed it at 28%. The owner passed on it.
The Honest 30 Minutes About Whether This Fits You
We have structured more than 2,000 policies across all 50 states. We have seen this strategy work exactly as designed, and we have seen it fail when there was no clear use for the capital. On a discovery call, we look at your business, run the numbers, and tell you whether a policy belongs in your capital plan. If you would rather learn first, The And Asset YouTube channel and the BetterWealth YouTube channel go deep on the math.
Book a Discovery CallFAQQuestions About the 28% Corporate Tax Rate
What did the Harris plan propose for the corporate tax rate?
The 2024 Harris platform proposed raising the federal corporate tax rate from 21% to 28%. The same 28% figure appeared in Biden administration budget proposals, so the number has surfaced more than once.
Did the 28% corporate tax rate ever become law?
No. Harris did not win the 2024 election and the 28% rate was not enacted. Corporate rates are set by Congress, so any future Congress can bring the proposal back, which is why the planning question outlives the election.
How much would a 28% corporate tax rate cost a business?
A 28% rate adds $70,000 of federal tax to every $1,000,000 of C-corp taxable income, moving the bill from $210,000 to $280,000. That is a 33% larger tax bill and $70,000 less to reinvest or distribute.
Does the corporate tax rate affect S corporations and LLCs?
Not directly. S corporations and most LLCs pass income through to their owners, who pay individual rates. Pass-through owners still feel a corporate increase indirectly through suppliers, customers, lenders, and the C corporations whose stock they hold.
Who actually pays a corporate tax increase?
People pay it, not the legal entity. Economists disagree about the exact split, but the burden lands on some mix of shareholders through lower after-tax profit, workers through slower wage growth, and customers through higher prices.
Can whole life insurance lower my corporate tax bill?
No. A whole life policy does not reduce the tax a corporation owes on its profit. What it can do is hold part of your capital in a bucket with different tax treatment, where growth is tax-deferred and policy loans are not taxable income under current law while the policy stays in force and is not a MEC.
Are policy loans taxable?
Policy loans are generally not taxable income under current law, provided the policy is not a Modified Endowment Contract and stays in force. If an unpaid loan grows past the cash value and the policy lapses, the gain can become taxable, so repayment discipline matters.
What is The And Asset?
The And Asset is BetterWealth's framework for using a properly structured whole life policy as a capital base. You only borrow against it for an activity that produces a return greater than the carrier's loan cost, so your dollars do two jobs at once: the policy keeps compounding while the deployed capital earns its own return.
How is The And Asset different from infinite banking?
Infinite banking, as Nelson Nash taught it, frames a whole life policy as a personal banking system for any purchase. The And Asset shares those roots but operates on different principles: you only deploy borrowed capital when the after-tax return clears the carrier's loan cost, and the policy is the capital base, not the destination.
How does a higher corporate rate change the math on borrowing against a policy?
A higher corporate rate shrinks the after-tax return on anything a C corporation invests in, so fewer deals clear the loan cost. A project yielding 7.9% before tax clears an illustrative 5.75% loan cost at a 21% rate but falls short at 28%.
Should I restructure my business because of a proposed tax change?
Not on a proposal alone. Model the change with your CPA, rerun your deployment hurdles at the proposed rate, and act when a bill has a realistic path through Congress. Entity changes carry their own costs and are hard to reverse.
- IRC Section 11 (Cornell Law): the federal tax imposed on corporate taxable income.
- U.S. Treasury, General Explanations of the Administration's Revenue Proposals: the annual Green Book detailing budget tax proposals.
- IRC Section 7702 (Cornell Law): the definition of life insurance for federal tax purposes.
- IRC Section 7702A (Cornell Law): the Modified Endowment Contract rules that govern overfunding.
- Nelson Nash, Becoming Your Own Banker: the origin of the infinite banking concept.
- BetterWealth resources: The And Asset book, The And Asset YouTube channel, and the BetterWealth YouTube channel.
I founded BetterWealth to treat life insurance as the capital tool it is, not the product most people get sold. Our team has structured more than 2,000 policies across all 50 states. I wrote The And Asset and host the BetterWealth and The And Asset YouTube channels. We are not tax advisors; work with your CPA on any tax decision. If you want an honest read on whether a policy belongs in your capital plan, book a discovery call. We will tell you if it does not.