The Incidence of the Corporate Income Tax is Irrelevant for its (Benefit-Based) Justification

Naitram, Simon; Weinzierl, Matthew

doi:10.3386/w29547

Cited by 2 publications

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“…In the example of the incorporate tax which normally places more burden on the wealthy individuals who usually hold more stocks dividends, when taxes are employed primarily as a means of income redistribution, the beneficiaries might be limited to workers. However, if corporate taxes are channeled into funding the infrastructure or public input, the advantages generated can both notably benefit workers and counterbalance the incorporate economic costs caused by the corporate income tax [7]. Conversely, a tax cut policy might stimulate investment from private capital at the cost of deteriorated infrastructure.…”

Section: Discussionmentioning

confidence: 99%

Tax Cuts Impact on the Economy from the Perspective of Debt and Exchange Rate

2024

HBEM

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In September of 2022, the newly inaugurated British Prime Minister, Liz Truss, introduced an ambitious policy involving significant tax cuts to stimulate the economy swamped by the COVID-19 pandemic. Regrettably, her ambitious plan eventually led to financial insolvency and catastrophically impacted on the UK's economic growth. Through the rigorous examination and analysis of data, this article primarily attributes her failure to the absence of consumer confidence and the outflow of capital, which were consequences of the substantial currency devaluation caused by the surging government debt. Then, the article draws comparisons between the UK's tax cut and successful case studies from the United States and China, which effectively managed the side effects of expansive tax cuts or similar policies that led to substantial increases in government debt. The findings argue that tax reduction policies cannot yield favorable outcomes unless they are the US with global currency status or in nations like China which can largely eliminate the currency devaluation by a governmental control on exchange rates.

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Section: Discussionmentioning

confidence: 99%