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SOURCE National Center for Policy Analysis
Eliminating or Reducing Corporate Taxes Would Up GDP, Wages
DALLAS, Aug. 5, 2014 /PRNewswire-USNewswire/ -- Eliminating the U.S. corporate income tax would dramatically increase domestic investment, GDP, real wages, and national saving, according to a new report by National Center for Policy Analysis Senior Fellow Laurence J. Kotlikoff.
America's relatively high marginal tax rate discourages both U.S. and foreign corporations from operating or investing domestically. However, eliminating or even reducing the tax rate would benefit workers, corporations, and the national economy, says Kotlikoff, also director of the Tax Analysis Center.
According to Kotlikoff's analysis, eliminating the corporate income tax would result in:
Even reducing the corporate tax would increase wages and GDP while producing just as much revenue. According to Kotlikoff, a "substantial, but still limited, roughly revenue-neutral reduction in the U.S. corporate tax rate produces growth effects that are pretty close to those arising under the complete elimination of the U.S. corporate income tax."
In his analysis, Kotlikoff projects that reducing the current 35 percent tax rate to 9 percent and eliminating loopholes would produce:
Under the current tax system, the corporate tax "drives investment out of our country with surprisingly small benefit in terms of government revenues," says Kotlikoff. "Eliminating the U.S. corporate income tax has great potential to make all Americans better off."
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