Do falling corporate tax rates lower the tax yield?

A recent EU paper gives the first impression that, although corporation tax rates have fallen across Europe, the tax take has not declined because the total proportion of corporation tax to GDP has not fallen. At first sight this would seem to give some support to versions of right wing economics that claim cutting taxes increases income. The authors of the study find this is not the case; what has happened is that economic activity has been shifted into companies to take advantage of the low tax rates.

Click on the title to go to the paper.