The recent fiasco related to the EU’s $13 billion fine against Apple for using Ireland to avoid paying taxes has yet again turned the spotlight onto the American tax system. That this is also an election year has only brought this perennial favourite topic into even sharper relief. Very few would argue that the system is not in desperate need of reform, yet exactly how this would be carried out is wide open to debate. In this week’s Economics Weekly, we look at the corporate tax rate and the potential impact that cutting this rate might have on investment and economic growth.
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Richard de Chazal, CFA is a London-based macroeconomist covering the U.S. economy and financial markets.