Question

an evaluation of the implications of ethical and social issues associated with reduction of corporate taxes. Provide your opinion on how the loss of these tax revenues will impact the country/society, using General Electric, Wells Fargo, or other corporations as an example to support your evaluation.

Answer 1

Reduction of corporate tax rate from 35 % to 21 % would have strong implications for US society. It will affect to world economies as well.

It is projected that Federal Government debt is likely to rise by $ 1.5 Trillion over the decade due to reduction in tax rate. Government would have to reduce its expenditure on various social benefit programs which would further increase inequalities and poverty in America. Hence, from ethical perspectives, tax reduction is unacceptable as it is against the norms of social and economic justice. it also poses threat to ideals of democracy.

General Electric, Wells Fargo and other corporations such as google are likely to save billions of dollar due to fall in tax rate. These firms would use such fund either to buyback share or use fund for speculative activities.

Now government spending on welfare schemes would definitely face significant drop. Therefore, economists do not consider it right action.