Corporate Taxes and Economic Growth
Published Monday, February 1, 2010
While the United States is a relatively low-tax country by OECD standards, with taxes as a share of GDP ranked fourth lowest among the 30 OECD member countries in 2007, it currently has the second highest corporate tax rate and has historically relied on corporate taxes to fund a larger share of the cost of government than the average OECD country.
This paper reviews empirical studies of the effects of high corporate tax rates and revenue shares on the economic growth of nations. The studies reviewed find that high statutory and effective corporate tax rates hinder a country's investment, productivity, and economic growth and, paradoxically, high statutory tax rates do not appear to result in higher corporate tax revenues.
