The Biden administration has rolled out a new infrastructure plan with the promise it will create millions of jobs, critics contend the “Made in America” plan would push the U.S. corporate tax rate so high that it will make it harder for U.S. companies to compete.

“President Joe Biden’s proposal to raise the federal corporate income tax rate to 28% would increase the combined average top tax rate on corporate income to 32.4%, the highest in the Organisation of Economic Co-operation and Development (OECD), reducing U.S. competitiveness and long-run economic growth,” said Gary Watson, a senior policy analyst at the Tax Foundation in Washington, D.C.

Watson said in a new blog that while much public relations focus has been on the federal rate, it is critical to include state tax rates when thinking about the total tax burden on corporations and their income.

Right now corporations in the U.S. pay federal corporate income taxes of 21% plus state corporate taxes that range from zero to 11.5%, resulting in a combined average top tax rate of 25.8% in 2021, the foundation said.

If Congress is able to enact Biden’s plan this year, it would create a 28% corporate tax rate and corporations operating in 32 states and the District of Columbia would face the highest combined corporate tax rate in the OECD, a distinction currently held by France with a 32.0% rate, according to the foundation.

Next year, France will lower its corporate tax rate to 25.8% leaving Portugal with the highest corporate tax rate in the OECD at 31.5%, Watson said.

With the Biden hike to 28%, corporations in Iowa, Minnesota, New Jersey and Pennsylvania would all face a combined corporate income tax rate at or above 35%, he said.

Only seven states—Ohio, Nevada, North Carolina, South Dakota, Texas, Washington, and Wyoming—would face a corporate rate less than 30%, all of which forgo a corporate income tax except North Carolina, which has a low rate of 2.5%.

“It is important to include state corporate income taxes when considering how raising the federal rate would impact U.S. competitiveness,” Watson said. “Raising the combined U.S. corporate rate to the top of the OECD would encourage corporations to depart the U.S. and reduce economic output and worker wages across the income spectrum. Retaining the 21% corporate rate ensures the U.S. remains an attractive location for corporate investment."

Right now, the economy is on a rebound after being crippled by the Covid pandemic last year. The U.S. economy added 916,000 jobs last month—the largest increase since August—as more American workers receive the coronavirus vaccines, the Bureau of Labor Statistics announced today.

The unemployment rate dropped to 6% as well, but critics of the tax hike worry that the economic expansion and job creation may be short-lived under massive tax hikes. Biden said he will introduce the second part of his infrastructure tax plan later this month, targeting households earning $400,000 with income, capital gains and estate taxes.

House Banking Committee Chairman Sherrod Brown (D-Ohio) disagrees with critics. “Biden’s plan would be paid for by ensuring this country’s largest corporations pay their fair share in taxes and are encouraged to create jobs here at home,” Brown said in a press release.

Brown “has been pushing for major corporations to pay their fair share for years and believes they should be encouraged to invest in workers here in the U.S rather than shifting jobs and production overseas,” his office said in the release.

But sticking U.S. corporations with the highest OECD tax rate doesn’t sound competitive or conducive to job creation, Watson said.

Even states that allow corporations to deduct state corporate income tax paid against the federal taxable income, lowering the effective federal corporate income tax rate, will not be able to create a competitive corporate tax if the Biden tax increase is passed, he added.

“For example, a corporation in Michigan may deduct tax paid at a 6% flat rate against a 28% federal corporate income tax, reducing its effective top federal rate to 26.3%, but still yielding a combined rate of 32.3%—higher than any OECD nation,” according to Watson.