How do corporate tax cuts help the economy?
The tax cuts would trickle down to workers through a multistep process. First, slashing the corporate tax rate would increase corporations‘ after-tax returns on investment, inducing them to massively boost spending on investments such as factories, equipment, and research and development.
How does tax cuts help the economy?
In general, tax cuts boost the economy by putting more money into circulation. They also increase the deficit if they aren’t offset by spending cuts. As a result, tax cuts improve the economy in the short-term, but, if they lead to an increase in the federal debt, they will depress the economy in the long-term.
What did corporations do with their tax cuts?
Much of it has gone into share buybacks, which jumped to record levels after the tax law was passed, though that money may then get reinvested in other businesses. “It looks like the corporate tax cut went mainly to buybacks,” said Mr.