via Wonk Room » Conservatives Beat The Drum For Permanent Corporate Tax Cuts.
Cutting corporate taxes is a tired conservative solution to just about everything. Remember, it was a centerpiece of Sen. John McCain’s R-AZ presidential campaign, even before the economic crisis hit. But as the Center for American Progress’ Will Straw wrote, permanent corporate tax cuts simply fail to provide stimulus:
The track record for such steps is poor in general, but they are particularly ill-suited for a recessionary period. After all, the reason that businesses and individuals are not investing at the moment has little to do with the taxes they may pay in the future and everything to do with a fear of losing money because there is no demand in the economy, asset prices are highly volatile, and credit is hard to come by.
Citizens for Tax Justice noted that “every dollar lost from cutting the corporate income tax would increase real GDP by just 30 cents.” That’s hardly the sort of stimulative effect that would justify slashing the corporate rate.
Tax cuts didn’t work, neither under Reagan, nor Bush, nor Bush. So the logic here is that more tax cuts will work to stimulate the economy this time?
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