Tax policy can play a key role in spurring an economic recovery—but not without sustained reform of both the corporate and individual income-tax systems.
So you are suggesting that companies which are doing well despite the recession --- like Apple and Google --- are not investment in future productivity? That will surprise the CFOs at those companies.
Business invest because they think they can make money. If they do not see increased demand it would be folly to invest, no matter if they paid zero tax.
The problem as I see it, from my own experience, is that there is no increased demand by anyone, consumer or producer. So why invest? Few have confidence, anywhere, in most business; so fussing with tax rates will do nothing. There is plenty of capacity for making just about anything. What's stopping people is that demand has fallen. Period. QED. They'd be happy to pay current taxes because the marginal gain, even after such tax, is vastly higher than zero they get today.
Business invest because they think they can make money. If they do not see increased demand it would be folly to invest, no matter if they paid zero tax.
The problem as I see it, from my own experience, is that there is no increased demand by anyone, consumer or producer. So why invest? Few have confidence, anywhere, in most business; so fussing with tax rates will do nothing. There is plenty of capacity for making just about anything. What's stopping people is that demand has fallen. Period. QED. They'd be happy to pay current taxes because the marginal gain, even after such tax, is vastly higher than zero they get today.
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