In an earlier post I pointed out that many countries with high corporate tax rates are doing well compared to countries with lower rates. I admitted that it’s not perfectly linear but it’s true enough for a reasonable person to conclude that lowering the corporate tax rate will not speed up our recovery.
Today, Keven Drum showed another chart which shows just how “high” our corporate tax rate actually is. It may be high compared to other nations, especially those suffering the worst effects of the world wide economic downturn, but it’s very low compared to what it used to be during any time in the last sixty years, even during Reagan’s administration.
What the chart also shows, as pointed out by readers, is that recessions seem to follow periods of lowering corporate taxes. It happened too often, in my opinion, to be a coincidence. Perhaps, as I’ve said before, what corporations do with all the money they save is invest in labor reducing technology or build factories overseas.
On the other hand, there might be a more indirect link between lowering corporate taxes and recessions. Low corporate taxes probably accompany other right wing policies such as cutting unemployment assistance or cutting funds for public transportation.
Either way, we have more than an abundant amount of evidence to show that cutting taxes for corporations isn’t the job-creating strategy that our Republican candidates say it is. The only reason they keep pushing that philosophy is they are getting paid to do so by corporate executives hoping to increase their profits by reducing their American workforce.