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Comment by hackuser | Hacker News Reader

Is there evidence of this? Tax reduction proponents often claim some offsetting benefit, but rarely does it seem to come true. Look up the Laffer Curve from the 1980s, when the Reagan administration claimed that tax cuts would spur economic activity and actually increase tax revenue.

Also, to a degree it's based on the premise that these companies are overwhelmed with high taxes and that is determining their behavior. Perhaps they have other motives or the rate isn't really too high for them.

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The evidence is that US corporations are stashing ~$2 trillion dollars offshore. I'm not saying cutting taxes will fix the problem, but it is very apparent that the current tax rate is determining their behavior. Unfortunately it can become a race to the bottom for countries trying to capture the taxes on that income.

> it is very apparent that the current tax rate is determining their behavior

That isn't necessarily true. It could be due to other laws, such as the one that allows them to stash money overseas tax-free. Perhaps that's the law that should change.

Yes, I should have said current tax law, not tax rate, but the getting a lower rate abroad is clearly the main driver.

> I should have said current tax law, not tax rate, but the getting a lower rate abroad is clearly the main driver.

I wasn't clear: I don't know that I accept that, though of course I've heard it many times. It's a narrative that suits people who want to cut taxes for corporations, but those people always have very convenient narratives. Has anyone seen evidence?

But income tax revenue grew robustly over the 1980's:

https://www.thebalance.com/current-u-s-federal-government-ta...

Thanks. The gross numbers depend on far more than tax policy; I'm not sure how meaningful they are. The economy tends to grow no matter what the policy, and remember that the US was coming out of what was, at that time, the worst recession since WWII. That said, I don't have evidence at my fingertips.

(Also, I'm not sure what to think of that website: Their anti-government bias seems to show through and their understanding of economics is poor. For example, the following fails basic microeconomics and pricing: the entire U.S. tax burden really falls on individuals. That's because corporations pass on their tax burden to families in the form of higher prices or lower wages. / Corporations must maintain their profit margin to satisfy stockholders, so they pass on any additional corporate taxes to consumers or workers. If only my company could just set whatever price and wages it wanted, and consumers and workers continued to buy and hire on at the same rate!)

There's very little evidence that tax cuts stimulate economic growth. If there was meaningful evidence the investigators would receive the Nobel Prize -- every year. And while economists can be relied upon to provide all sorts of elaborate theoretical "evidence" the actual empirical evidence tends to confirm the opposite: significant tax cuts have zero to negative impacts on growth [1].

It will be interesting though to see what tax cuts do in such a low-growth environment. In the end it seems Wall St. will be the big winner. There's plenty of actual evidence that tax cuts (a) eventually make it back to investors once finance takes its cut and (b) tax cuts lead to most firms adopting a much higher risk profile [2]. Ironically we could see lots of mergers and overseas expansion.

[1] http://graphics8.nytimes.com/news/business/0915taxesandecono...

[2] https://www.bloomberg.com/news/articles/2017-04-19/u-s-tax-c...

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