BELGRADE, Serbia (AP) — Several thousand people have surrounded Serbia’s state TV building during anti-government protests requesting more media freedom in the Balkan country. The...
ECB experts: US tax law could erode Europe’s tax base
Economy & Business By: The Bullet Wire February 5th, 2018 8:02 am
FRANKFURT, Germany (AP) — Economists at the European Central Bank say that the U.S. corporate tax cut should lift the world’s largest economy in the short term but warn it could erode the tax base in European countries by intensifying global competition for lower rates.
Their short article, released Monday and set to appear Thursday in the ECB’s regular economic bulletin, says that the cut in business taxes will provide a “significant fiscal stimulus” to growth in the U.S. and would be “positive in the short term.”
It warned that long-term effects were less clear, especially if the cut leads to larger U.S. budget deficits. And it said that such fiscal stimulus tends to have less effect during periods of growth than during recessions. Additionally, they said that much economic research indicates that government spending tends to provide more stimulus per dollar than an equivalent amount in tax cuts.
Effects on the 19-country eurozone were “highly uncertain and complex” but could include tax base erosion if countries around the world compete by lowering their tax rates to attract businesses.
“Lower U.S. corporate tax rates raise the tax attractiveness of the United States relative to other countries,” the report said. “Prior to the reform, the U.S. corporate tax rate stood above the rates of all large euro area countries, while, after the reform, it is close to the lower end of rates in those countries.”
The legislation, which was pushed by President Donald Trump and signed into law in December, lowers the corporate tax rate from 35 to 21 percent, among other changes. The changes took effect Jan. 1.
Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Featured & Breaking
UGHELLI, Nigeria (AP) — Heavy military deployment, scattered attacks on polling centers and at least eight deaths were reported on Saturday as Nigerians went to...
MINSK, Belarus (AP) — Ukrainian police said 15 officers were injured Saturday in a clash with far-right demonstrators who disrupted a campaign appearance of President...
LONDON (AP) — With tensions escalating, Britain’s House of Commons leader said Saturday that European Union officials need to take seriously British proposals for ending...
"Unless you believe we’re governed by shape-shifting space lizards — your darkest suspicions about how the world operates are likely an underestimate."
(The Intercept)- AS I READ The Devil’s Chessboard: Allen Dulles, the CIA, and the Rise of America’s Secret Government, a new book by Salon founder David...