0% Corproate Tax Could Increase Tax Revenues in the USA?
March 13, 2013 Taxation in USA
WASHINGTON D.C. – Any move to cut the rate of corporate taxes in the USA could result in an increase in the overall amount of taxes collected, and such cuts may also help improve economic growth in the country.
In a new report on March 12th the Tax Foundation suggested that reducing the rate of corporate taxes in the USA could raise tax revenues by billions of dollars, while creating a “…larger, more vibrant economy,” and generating “…higher real incomes and a greater supply of goods and services. “
According to the report, while tax cuts would immediately reduce tax collections from businesses, the move would ultimately increase overall tax revenues by spurring much greater levels of economic activity, and leading to increases in the collections of personal income taxes and sales taxes.
The experts of the Tax Foundation estimate that the USA cuts the corporate tax rate from the current level of 35 percent to 14 percent, it would ultimately maximize tax revenues by an extra USD 27 billion annually.
In an extreme scenario, if the corproate tax rate were zeroed in the USA, tax collections would still increase by at least USD 18 billion per year compared to the current level.
Summarizing the findings, the leading researcher behind the report Michael Schuyler said “…the benefits from a more prosperous economy would justify lowering the corporate tax rate even if federal revenues fell, but given the expected revenue gain, it’s a slam dunk.”
Photo by Philip Taylor PT