One thing that major corporations don’t like doing is paying taxes. That is why many corporations do whatever they can legally do to lower their tax liability. Sometimes this means moving jobs to other countries so they don’t have to pay a lot in taxes. One possible solution to this problem is lowering the corporate tax rate. This article will explore three reasons why lowering the U.S. corporate tax rate is a good idea.
A Lower Corporate Tax Rate Would Mean More Jobs in America
If the tax rate were lowered, companies would not have an incentive to move jobs overseas. They would keep more jobs here in the United States since they would not have to worry about spending so much in taxes. More jobs mean more people would be able to put more money back into the economy.
A Lower Corporate Tax Rate Would Mean Lower Prices for Consumers
When businesses have expenses, they usually incorporate the cost of those expenses into the prices charged to consumers. Taxes are no exception. If the corporate tax rate gets lowered, corporations would be able to lower their prices. Since the corporations would have lower expenses, they could lower prices and still make a profit.
A Lower Corporate Tax Rate Would Lead To an Increase in New Businesses
Running a new business is a risky endeavor. There are lots of costs involved with setting up a new business. If the corporate tax rate were lowered, entrepreneurs would be encouraged to start new businesses. It would take less money to be profitable. Small business owners would have more money to invest in growing their business if they didn’t have to spend so much money on paying corporate taxes.
Image credit: Phillip Ingham