Steven Bank Talks to Mel Magazine on Potential Effects of Corporate Rate Cut on Employment and Wages

Professor Steven Banks talked with Mel Magazine on the potential effects the corporate tax rate cut will have on employment and wages. With the proposed tax plan, businesses may invest more in capital, making workers more productive, and in turn, more valuable in the labor market and able to earn a higher salary. As Professor Bank states, however: “The real argument for labor benefiting from the tax bill is the economy will generally grow and benefit labor because of that. It’s not about corporations taking the savings and using the savings to give everyone a raise. Companies don’t just give out bonuses and increase wages because they have a sudden windfall.”

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