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  2. Want to boost investment? Cutting taxes may not be the right decision

Want to boost investment? Cutting taxes may not be the right decision

By tfk on April 2, 2007.

Higher corporate taxes may attract foreign investment | Science Blog:

A team of leading economists has challenged the current political drive to cut corporate taxes — with new research showing that countries with higher taxes and higher social welfare spending are more successful in attracting overseas investment. …

After analysing data from 18 OECD (Organisation for Economic Co-operation and Development) countries over a 14-year period, the team found that the countries which attracted the highest levels of foreign investment — a key economic target of most governments — were actually the ones with higher taxes, and higher public social expenditure as a proportion of GDP.

It comes as no surprise, then, that corporate America is jumping on the universal healthcare bandwagon. One way or another, they (and we) pay for healthcare, good and bad. A system which spreads the cost more evenly and more fairly would save corporations money, and improve their workforce.

This result demonstrates nicely undermines the conventional wisdom that cutting taxes is the only way to attract business investment. Companies are not just looking for a tax shelter when they invest or relocate. Good schools, healthcare, roads, and strong communities are also important, and taxes wisely spent can attract new business investment, improving the economy.

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Policy and Politics

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In response to the terrorist attacks of September 11, Congress and the Bush administration have considered alternative tax cut proposals to bolster the economy at a vulnerable moment.
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Dinesh

FSBO