The Economic Effects of Adopting the Corporate Tax Rates of the OECD, the UK, and Canada
A reduction in the corporate income tax rate to 25 percent would increase the size of GDP by 2.3 percent at the end of the adjustment period. A further cut to 20 percent would boost long-term GDP by 3.3 percent. Reducing the corporate income tax rate to 15 percent would have the largest impact, increasing GDP by 4.3 percent over the long-term. Workers would also benefit from a corporate rate reduction. Depending on the size of the corporate rate reduction, we would expect to see an additional 425,000 to 613,000 new jobs, and wages would increase by between 1.9 percent and 3.6 percent over the long-term.