Quote:
Originally Posted by spence
The front half of your statement doesn't make any sense.
The back half makes some sense but it's more complicated than you state. In capital budgeting the tax rate is just one variable in the calculation. The net return is a factor of investments, anticipated benefits, taxes on profit (income less expenses) as well as the hurdle rate etc...
Dialing the corporate tax rate down isn't going to impact investments as much because if the projects are justified they would typically need to be justified by a wider margin than the difference in tax rates provide.
Small business could be different.
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Dialing the corporate tax rate down isn't going to impact investments as much because if the projects are justified they would typically need to be justified by a wider margin than the difference in tax rates provide"
Pure speculation on your part.
Cutting the corporate tax rate tilts the scales of the cost/benefit math. It doesn't make every single project now viable. But it makes more projects viable.
Corporations often look for a 15% return on any investments. Being able to keep 80% of income versus 65%, is not an insignificant shift.
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