Cutting Corporate Taxes Around the World

Cutting corporate taxes can be a complex process, but it's not impossible. Many countries offer tax incentives and deductions to attract businesses and stimulate economic growth.

In the US, for example, companies can take advantage of the Research and Development (R&D) tax credit, which can provide a significant reduction in corporate taxes. This credit can be worth up to $250,000 per year.

Some countries, like Ireland, have a corporate tax rate as low as 12.5%, making it an attractive destination for multinational corporations. This low tax rate can result in significant savings for companies operating in the country.

Cutting corporate taxes has a significant impact on the economy.

The corporate rate cut is not trickling down to workers as promised.

Corporations went on a massive stock-buyback spending spree after the rate cut, with little to no benefit to workers.

This is despite Republican promises that companies would boost wages and jobs.

A big portion of corporate tax cuts also goes to foreign investors, who own more than 40 percent of all U.S. stock.

Foreign investors received $134 billion in tax cuts in the first three years of the Trump law.

The corporate income tax is one of the fairest ways of raising revenue, as it overwhelmingly comes out of the pockets of shareholders.

Shareholders are overwhelmingly wealthy, which means they can afford to absorb the tax burden.

Worker wages remained flat despite the rate cut, with no significant boost to employment.

At least 87 of the most profitable corporations earned cumulative profits of $950 billion and paid an effective tax rate below 10% between 2018 and 2022.

The average effective tax rate for large profitable corporations dropped from 16% in 2014 to just 9% in 2018, with a quarter of them paying no taxes at all.

Raising the official tax rate would help increase the rate companies actually pay, as many big corporations are currently paying much less than the official rate already.

The rate cut isn't reaching workers as promised. Republicans claimed that slashing the corporate rate by two-fifths would boost wages and jobs, but what actually happened was corporations went on a massive stock-buyback spending spree.

Corporations prioritized giving their executives huge bonuses over raising worker wages. In fact, worker wages remained flat.

Foreign investors own more than 40 percent of all U.S. stock, and they received a big portion of the corporate tax cuts. This means that a significant amount of the tax cuts went to wealthy foreign investors.

87 of the most profitable corporations earned cumulative profits of $950 billion and paid an effective tax rate below 10% in the first five years of the Trump tax law.

Raising the official tax rate would help increase the rate companies actually pay, which is currently below half the statutory rate.

The average effective tax rate for large profitable corporations dropped from 16% in 2014 to just 9% in 2018, with a quarter of them paying no taxes at all.

Corporate tax cuts across 29 nations highlight a strategic global shift toward business-friendly policies aimed at attracting international companies and stimulating economic growth.

Countries like Singapore and Brazil are creating appealing tax landscapes, drawing businesses eager to optimise their operations.

Tax cuts have been implemented in various countries to boost economic growth. In the United States, the Tax Cuts and Jobs Act of 2017 reduced the corporate tax rate from 35% to 21%.

Some countries have taken a different approach to tax cuts. For example, Japan's corporate tax rate is 30.62%, one of the highest in the developed world.

29 countries have lowered their tax rates on business to attract more investment in just the last few years.

Some of these countries might be labeled as "communist", "socialist", or "backward", but they all have one thing in common: lower corporate taxes.

One of the most developed and promising economies in Africa recently reduced taxes from 25% to 22%.

Lower corporate taxes can attract more investment, which can help boost a country's economy.

Countries are competing with each other to offer the most attractive tax rates to businesses.

In the United States, the Tax Cuts and Jobs Act of 2017 reduced the corporate tax rate from 35% to 21%. The tax cuts benefited large corporations significantly, with some even using the savings to buy back their own shares.

Canada's tax cuts have been more targeted, with a focus on small businesses and entrepreneurs. The country's tax rate for small businesses was lowered from 11% to 9%.

Australia's tax cuts were implemented in stages, starting with a reduction in the top marginal tax rate from 49% to 45% in 2015. This change was designed to benefit middle-class workers.

The United Kingdom's tax cuts have been a subject of controversy, with some arguing that they favor the wealthy. The country's top tax rate was lowered from 45% to 40% in 2019.

The impact of tax cuts can be seen in countries like Singapore, where the government has implemented a low-tax environment to attract businesses and talent. The country's corporate tax rate is a flat 8.5%.

Cutting corporate taxes is a complex issue, and one of the most significant concerns is the impact on government revenue. Reducing the corporate tax rate to 15 percent would reduce federal revenue by $673 billion from 2025 to 2034 on a conventional basis.

The revenue loss would be substantial, but it's not the only consideration. After factoring in positive economic feedback, the proposal would reduce revenue by about $460 billion over 10 years. In 2034, revenue would fall by $75 billion on a conventional basis but by a smaller $40 billion on a dynamic basis.

The revenue loss would also lead to an increase in the debt-to-GDP ratio, from 201.2 percent in 2065 to 202.6 percent on a dynamic basis, a 1.4 percentage point higher increase than the baseline scenario.

Here's a breakdown of the revenue effects of reducing the corporate rate to 15 percent over the next decade:

On the other hand, a lower corporate tax rate would boost incomes by increasing the after-tax return on investment for owners of corporate equities, which include a large swath of Americans across all income levels. After-tax income would rise by 0.8 percent on a conventional basis and by 1.1 percent on a dynamic basis.