Corporate tax cuts: examining the record in advanced economies

Djankov, Simeon ORCID: 0000-0002-0822-6456 (2017) Corporate tax cuts: examining the record in advanced economies. Financial Markets Group Discussion Papers (764). Financial Markets Group, The London School of Economics and Political Science, London, UK.

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Abstract

This discussion paper examines evidence from 39 economies where cuts in the corporate income tax rate have been implemented since 1986. The paper also summarizes the findings of nearly two dozen studies on the fiscal effects of corporate tax rate cuts. The main conclusion from these analyses is that radical tax rate cuts, of 15 or more percentage points, are rare and usually happen only after major fiscal disruptions that weaken the political influence of business sectors that oppose reductions in the tax preferences from which they have benefited. In contrast, more modest corporate tax cuts of about 10 percentage points are typically effected in normal economic conditions and are practical to implement as they do not trigger large fiscal imbalances.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://www.fmg.ac.uk/
Additional Information:	© 2017 The Author
Divisions:	Financial Markets Group
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance
JEL classification:	G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H20 - General
Date Deposited:	02 Jun 2023 11:18
Last Modified:	01 Nov 2024 04:10
URI:	http://eprints.lse.ac.uk/id/eprint/118975

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