Do corporate income tax rate reductions accelerate growth? /

The opinions and recommendations in this report, and any errors, are those of the authors, and do not necessarily reflect the views of the funders of this report. [...] The easiest place to begin to assess the long-term evolution of the CiT rate is at the federal level, where record keeping goes back to the 1920s. [...] The correl- ation between the effective CiT rate on the largest firms and the statutory Canadian CiT rate is 0.88 (very high), which signals that the statutory rate overwhelmingly explains the weighted average effective rate on large firms. [...] Both the weighted average effective CiT rate on the top 60 firms and the combined statutory CiT rate on the corporate universe were halved in the past three decades, with the bulk of the reduction coming since 2001. [...] The deeper the cuts to the CiT rate, the slower the growth of GDp.