Reducing Corporate Income Tax would Create Jobs

A new paper from the St. Louis Federal Reserve concludes:

This paper finds that a reduction in the corporate income tax leads to moderate job creation and higher wages. In the extreme case, the elimination of the corporate income tax would reduce the non-employed population by 5.4 percent …

Yet the Obama administration's response to this has been not only to keep US corporate tax rates as the highest in the world, but to propose subjecting the foreign income of domestically based companies to US taxation as well. Now WHO is it that is driving jobs overseas?

The Takers to Makers Ratio is Increasing

If you want a simple explanation of why the economy is not going to be roaring back anytime soon, this chart sums it up. It's the percentage of the population that is employed -- i.e. producing all the money that government wants to spend or redistribute to the non-working. Some of this is related to the aging population profile. Some of it is due to the fact that we have increased subsidies for those not working. Irrespective of the reason, it's pretty hard to grow production with this many fewer people working.