The Washington Post’s Jeff Stein notes that the recent drop in corporate tax rates in the U.S. is part of a long-term global trend.
The “average corporate tax rate globally has fallen by more than half over the past three decades, from 49 percent in 1985 to 24 percent in 2018,” Stein writes, citing a recent paper by economists Gabriel Zucman of the University of California at Berkeley and Thomas Torslov and Ludvig Wier of the University of Copenhagen.
The culprit, according to the economists, is a race to the bottom among nations to attract multinationals as they shift more of their profits to tax havens such as Bermuda and Ireland.
“Profit shifting, more than tax competition for productive capital, is the key driver of this decline,” the economists said.
