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1 Erica York, The Benefits of Cutting the Corporate Income Tax Rate 1 (2018)

handle is hein.taxfoundation/bnftcutcx0001 and id is 1 raw text is: 





The Benefits of Cutting the

Corporate Income Tax Rate


FISCAL
FACT
No. 606
Aug  2018


The Tax Foundation is the nation's
leading independent tax policy
research organization. Since 1937,
our research, analysis, and experts
have informed smarter tax policy
at the federal, state, and local
levels. We are a 501(c)(3) nonprofit
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@2018 Tax Foundation
Distributed under
Creative Commons CC-BY NC 4.0
Editor, Rachel Shuster
Designer, Dan Carvajal
Tax Foundation
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Washington, DC 20005


Erica York
Analyst



Key   Findings

   *  One  of the most significant provisions of the Tax Cuts and Jobs Act is the
      permanently  lower federal corporate income tax rate, which decreased from
      35 percent to 21 percent.

   *  Prior to the Tax Cuts and Jobs Act, the United States' high statutory
      corporate tax rate stood out among rates worldwide. Among  countries in the
      Organisation for Economic Co-operation  and Development  (OECD),  the U.S.
      combined  corporate income tax rate was the highest. Now, post-tax reform,
      the rate is close to average.

   *  A corporate income tax rate closer to that of other nations will discourage
      profit shifting to lower-tax jurisdictions.

   *  New  investment will increase the size of the capital stock, and productivity,
      output, wages, and employment  will grow. The Tax Foundation Taxes and
      Growth  model estimates that the total effect of the new tax law will be a 1.7
      percent larger economy, leading to 1.5 percent higher wages, a 4.8 percent
      larger capital stock, and 339,000 additional full-time equivalent jobs in the
      long run.

   *  Economic  evidence suggests that corporate income taxes are the most
      harmful type of tax and that workers bear a portion of the burden. Reducing
      the corporate income tax will benefit workers as new investments boost
      productivity and lead to wage growth.

   *  If lawmakers raised the corporate income tax rate from 21 percent to 25
      percent, we estimate the tax increase would shrink the long-run size of the
      economy  by 0.87 percent, or $228 billion. This would reduce the capital stock
      by 2.11 percent, wages by 0.74 percent, and lead to 175,700 fewer full time
      equivalent jobs.


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taxfoundation.org

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