During the debate about the Trump tax plan, proponents made three main arguments in favor of reducing the federal corporate tax rate from 35 percent to 21 percent.
- A lower rate would be good for workers, consumers, and shareholders.
- A lower rate would boost American competitiveness.
- A lower rate would produce some revenue feedback for the IRS.
The last item involves the “Laffer Curve,” which is a graphical representation of the non-linear relationship between tax rates and tax revenue.
Put in simple terms, entrepreneurs, investors, and business owners have more incentive to earn money when tax rates are modest.
High tax rates, by contrast, discourage productive behavior while also giving people a bigger incentive to find loopholes and other ways of avoiding tax.
This does not mean that lower tax rates produce more revenue, though that sometimes happens.
The main takeaway is the most…
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Utopia, you are standing in it! 
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