Tax legislation passed by the Senate and the House would change corporate taxes, impacting businesses, individuals, and the economy. What could change under the legislation? Compare past tax changes to economic performance throughout history and decide for yourself.
Changing the corporate tax rate affects the amount corporations must pay in taxes and what they get to keep as profit. Generally, they can do a few things with their profits. One option is to invest…
Another option is to pay their employees higher wages or hire more people. Profit could also be passed through to investors in the form of capital gains earnings.
GDP, employment, stocks, and the deficit could be affected if corporations spend their profits, investors spend their returns, and employees spend their increased earnings.
Sources
Adjusted Gross Income (AGI), Top Marginal Tax Rates, Top Bracket for Married Returns, Corporate Income Tax
Jobs per Working-Age Person
GDP, Deficit
Office of Management and Budget
Private fixed investment
Bureau of Economic Analysis (BEA)
Capital Gains
