The Corner

Cutting Corporate Taxes

From my new Bloomberg column:

At the low end of estimates, three economists led by Mihir Desai have found that 45 percent of the corporate income tax falls on labor. The high-end estimate comes from R. Alison Felix, an economist at the Federal Reserve Bank of Kansas City, who concluded that labor pays 420 percent of the burden: For every dollar of revenue the tax raises, wages fall by $4.20. A study by the Tax Foundation, a nonpartisan think tank, split the difference, finding that wages drop $2.50 for every dollar raised.

The column also argues that the tax is going to be cut sooner or later.

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