Freeman:
The essential point is that lower corporate income tax rates improve economic activity. In the 30 years since the 1986 Act Western Europe and other developed countries have lowered their tax rates. Capital has become more mobile with increased technological capability. The US has to compete by lowering its corporate tax rate.
Although not as far reaching as the 86 Act -- and not nearly as good -- the House Plan is helpful because it does simplify (AMT, manufacturing preferences, worldwide taxation) and reduce rates.
The current corporate tax plan is a tax cut so trying to use the corporate tax increase plan of 1986 to argue that we will get great growth and it will be revenue neutral...is extremely dubious. If the corporate tax increase of 1986 caused economic growth...then we're doing the opposite thing here. Here, we are just cutting corporate taxes and hoping that will get some of that back in increased tax receipts. The supply-sider's dream...that never works.
The essential point is that lower corporate income tax rates improve economic activity. In the 30 years since the 1986 Act Western Europe and other developed countries have lowered their tax rates. Capital has become more mobile with increased technological capability. The US has to compete by lowering its corporate tax rate.
Although not as far reaching as the 86 Act -- and not nearly as good -- the House Plan is helpful because it does simplify (AMT, manufacturing preferences, worldwide taxation) and reduce rates.