Unless you earn more then $200,000 a year corporate tax cuts likely make your life worse. Even though it’s a myth, it’s long been argued that by cutting taxes for wealthy companies jobs will magically pop into existence. Indeed, this myth is so pervasive in modern capitalism that we’re increasing inequality as a byproduct of supporting tax cuts. The good news is that the discourse is changing. Every year there’s more evidence that helping the 1% is detrimental to the rest of society and people are growing more aware of this. This month the Harvard Business School released their research on corporate tax cuts.
In the paper Corporate Tax Cuts Increase Income Inequality (pdf), Rouen and his collaborators, Duke University professors Suresh Nallareddy and Juan Carlos Suárez Serrato, analyze data created by tax filings to compare effects on workers at varying compensation levels in different US states with and without tax cuts.
“Compensation and income inequality are very relevant to managers,” Rouen says. “This is something that they’re now having to deal with in terms of SEC disclosures and having to disclose CEO pay ratio. Active managers are often the face of income inequality, in that these are the people who set the pay for everyone else and also are the highest paid employees in their organizations.”
Thanks to Delaney!