As India Slashes Corporate Tax, U.S. Evidence May Come Handy

Sept. 23, 2019, 2:48 AM

India’s decision to cut corporate taxes may benefit from lessons learned in the United States.

A recent study suggests that the rise in U.S. business investment since the passage of the Tax Cuts and Jobs Act in late 2017 isn’t necessarily due to the cut in the corporate tax rate from 35% to 21%, which aimed to lower the cost of capital. The paper published by the International Monetary Fund puts forth a simpler reason: investment has been rising because domestic demand was boosted by lower personal taxes and higher government spending.

India hasn’t decided on cuts to personal taxes, ...

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