Question

What’s the impact of the corporate tax on economic growth compared to Regen and Bushes cuts? Name three aspects of tax overhaul and what are their benefits and consequences?

Answer 1

The impact of a corporate tax affects the economic growth significantly and has a long term affect on the growth. A high corporate tax rate would increase the cost of capital of the economy and this would further slow down the investment in the economy and thereby affect the economic growth.

The second part of the question talks about the three aspects of a tax overhaul:

1. The personal income taxes will be reduced which would be overhauling of credit finances.
2. There will be capital gains on taxes where lowering the amount of capital gains tax rate, the amunt of money paid of capital gains and at other times keeping the rates at the same level
3. on the import export front, the value of the currency will offset the import price increase which would allow the individuals of the country to still buy enough goods of what they desire and how the social tax rates would help in the public funding and financing of goods.