How does our corporate tax impact our global competitiveness?   

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The answer to this will differ from country to country and different people will have different arguments on the subject.  However, a general rule is that, all other things being equal, a higher level of corporate tax makes a country less competitive on the global level than it would otherwise be.

The reason for this is that high corporate taxes are likely to discourage the growth of companies.  They rob companies of the incentive to grow because so much of their income is taken away in tax.  In addition, companies that must pay high taxes are likely to be outcompeted on price by foreign companies that have lower taxes.  The foreign companies can charge lower prices for the same goods or services because they lose less of their income to tax.

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