High­er cor­po­rate tax­es may attract for­eign invest­ment | Sci­ence Blog:

A team of lead­ing econ­o­mists has chal­lenged the cur­rent polit­i­cal dri­ve to cut cor­po­rate tax­es — with new research show­ing that coun­tries with high­er tax­es and high­er social wel­fare spend­ing are more suc­cess­ful in attract­ing over­seas investment. …

After analysing data from 18 OECD (Organ­i­sa­tion for Eco­nom­ic Co-oper­a­tion and Devel­op­ment) coun­tries over a 14-year peri­od, the team found that the coun­tries which attract­ed the high­est lev­els of for­eign invest­ment — a key eco­nom­ic tar­get of most gov­ern­ments — were actu­al­ly the ones with high­er tax­es, and high­er pub­lic social expen­di­ture as a pro­por­tion of GDP.

It comes as no sur­prise, then, that cor­po­rate Amer­i­ca is jump­ing on the uni­ver­sal health­care band­wag­on. One way or anoth­er, they (and we) pay for health­care, good and bad. A sys­tem which spreads the cost more even­ly and more fair­ly would save cor­po­ra­tions mon­ey, and improve their workforce.

This result demon­strates nice­ly under­mines the con­ven­tion­al wis­dom that cut­ting tax­es is the only way to attract busi­ness invest­ment. Com­pa­nies are not just look­ing for a tax shel­ter when they invest or relo­cate. Good schools, health­care, roads, and strong com­mu­ni­ties are also impor­tant, and tax­es wise­ly spent can attract new busi­ness invest­ment, improv­ing the economy.