The case against cutting the corporate tax rate

by David Richardson

It is often argued that reductions in the corporate tax rate are necessary to create employment, increase investment and deliver a range of other benefits to the Australian community. However, despite the widespread support for this view, particularly among the business community, the theoretical and empirical case for such an expensive change in policy is weak. This paper is structured as answers to a series of questions about the design and impact of the taxation of corporate income in Australia however it begins with a brief historical overview of the tax treatment of profits in Australia.

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