by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Reduce the corporate income tax to 25 percent and allow all businesses to fully expense capital investments. These reforms would boost GDP by 6.6 percent over a decade, creating 1.2 million jobs. The bottom 20 percent of income-earners would see their post-tax income rise by 5.9 percent, while the top 20 percent would get a 6.5 percent raise. …
… Option 2
Replace the corporate income tax with a value-added tax, a type of consumption tax. Interestingly, this option would actually be a net tax increase, but still grow the economy. This option would increase the economy by 5.5 percent over roughly 10 years, creating 337,000 jobs. The Tax Foundation says the economic growth occurs despite the tax hike “because value-added taxes allow businesses to deduct the full cost of investment … significantly reduc[ing] the cost of capital.” …
… Option 3
Allow full expensing of capital investments. This change would boost GDP by 5.4 percent over roughly 10 years, creating 1 million jobs. The bottom 20 percent of income-earners would see their post-tax income rise by 4.9 percent, while the top 20 percent would get a 5.4 percent raise.