2007 Des Moines Register Republican debate: on Corporations

Rudy Giuliani: Reduce corporate tax from 35% to 25%, to increase revenue

There are other taxes we should get rid of. We should get rid of death tax and a whole group of others, but the first one should be the corporate tax.

Rudy Giuliani: FactCheck: Corporate tax cut would reduce revenue by half

He’s certainly not the only Republican politician to state this view. But you won’t find many economists, Democrat or Republican, who subscribe to it. George H.W. Bush famously called this view “voodoo economics” while campaigning for the Republican nomination in 1980.

Economists agree that lower taxes tend to produce higher economic growth, which does produce additional tax revenue--but not enough to pay for what’s lost. The former chair of the Council of Economic Advisers under George W. Bush, published a paper last year in which he calculated that over a number of years, capital gains tax cuts generate enough growth to pay for maybe half of the lost revenue. Cuts in taxes on wages would bring enough revenue to pay for about 17% of revenue lost.