Quote:
Originally Posted by rubecube
Companies and businesses should be formed on the basis of supply and demand, correct? Isn't that the foundation of free market capitalism? Lowering the corporate tax rate doesn't increase demand for a product.
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This is not how it works at all...
Products and services are based on supply and demand. Companies and businesses are responsible for providing these while maximizing profit. Lowering the corporate tax rate means a business retains more profit which can then be reinvested into the company. So you're right that tax rates don't influence demand for a product (directly at least, though indirectly this could be argued), but they do determine impact how profitiable a company is and where they spend their revenues (less to reinvest into the business because a bigger share of profit went to the government).