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Political Factoid
With a corporate income tax rate
of 50% (for example), pre-tax corporate
investments* cost only fifty-cents
on the dollar.
That provides a positive
incentive to re-invest the
company profits, rather than
pay them out in dividends
or even horde them as cash.**
At a tax rate of 75%, company improvements
cost only 25 cents on the dollar - an even
stronger incentive.
This explains the correlation of historical data,
where strong job creation occurred when
taxes were higher, such as the 1960's and 70's.
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In new plants, equipment, jobs, etc.
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| ** |
Maybe today's Republican economists
cut class the day that was being taught.
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