Slashing national company tax rates has become the world’s business target du jour.
But although cutting the company tax rate attracted businesses to Ireland, it didn’t stop Ireland from going broke when its land price bubble burst in 2007, Business Council of Australia.
In fact, the USA became the most prosperous country in the world during the period it had very high company tax rates. You see, these captured externalities–unearned super-profits, or economic rents–ensured they couldn’t be capitalised into higher land prices, at great cost to businesses and individuals. Your own 1995 BCA publication, “Refocusing Microeconomic Reform” picked up very nicely on this point. What’s since happened to your leadership? Have you become proponents of rent-seeking?
139 years ago, a bloke by the name of Henry George made the insightful discovery that business profits and wages rose and fell together, inversely to the rate of rent-seeking in land prices, BCA.
You are mistaken in promoting Donald Trump’s cuts in company tax and the Turnbull Government’s proposal to do likewise, unless there are concomitant cuts in taxes on wages.
You’ve shown no recent leadership at all, BCA. Australia’s failure to capture sufficient land rent publicly has inflated a bubble that is about to burst savagely upon us.