Corporate tax cuts don’t work

That’s the headline of a short article in the current edition of The World Today, the flagship publication of London-based think tank Chatham House. An excerpt:

“Countries need not engage in a global race on tax. IMF research has shown that many developing countries have lost out heavily through trying to compete on tax: Kenya looks set to abolish its extensive tax holidays which it estimates cost it $1.1 billion annually, with little reward in genuine new jobs or investment.”

The authors will be familiar to regular readers of this blog.

Please let us know in the comments if you disagree with anything in here, with a detailed explanation of why you disagree. We are surprised that nobody else has picked up on these basic ideas, and that so many people think that it’s a good idea for a country to try and engage in tax wars – which have no redeeming features.