Four for One?

by David Richardson

Are there really four dollars benefit for every one dollar company tax cut?

Last year Treasury published a paper which purported to show that there was a four dollar benefit for every dollar cut in company taxes. In the paper accompanying the 2016-17 Budget, a new set of results was published which dealt directly with cutting the company tax rate from 30 to 25 per cent. The latter paper did not put it in terms of benefit per dollar company tax cut but its results can be reworked to obtain the implied answer. 

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