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Corporate Taxes, Jobs, and Income

A recent Economic Policy Institute report, Competitive” distractions – Cutting corporate tax rates will not create jobs or boost incomes for the vast majority of American families, provides some useful data and charts. For example, the graph here compares changes in productivity and hourly compensation (Data are for average hourly compensation of production/nonsupervisory workers in the private sector and net productivity of the total economy. “Net productivity” is the growth of output of goods and services minus depreciation per hour worked.) You can download the data which can be used for linear regression.  There are other graphs in the article with data that can also be used.

Beyond that the article is rich with quantitative information that can be used in a QL based course.  For example, there is a lengthy discussion on the statutory and effective tax rates of corporations and how the U.S. compares to the rest of the world. The conclusion:

We find their central argument—that U.S. corporations face high corporate taxes—to be empirically false. While U.S. statutory tax rates are higher, the effective tax rate paid by corporations is in fact roughly equivalent to the effective tax rates of our peer countries, due to loopholes in the U.S. tax code.

 

About Thomas J. Pfaff

Thomas J. Pfaff is a Professor of Mathematics at Ithaca College. He created this website because he believes that sustainability, ranging from climate change to social justice, should be included in all courses whenever possible.

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