IES Blog

Will lowering the corporate tax rate boost employment?

Posted on December 20th, 2012 Read time: 1 minutes

As federal lawmakers grapple with a solution to the looming fiscal cliff, HR administration professionals should consider how potential decisions could affect businesses and talent acquisition. Nonprofit charity is examining both sides of one of the most heated debates surrounding the fiscal cliff topic: Whether or not lowering federal corporate tax rate will create more jobs.

Proponents state lowering the corporate tax rate will incentivize companies to hire employees in the U.S. and invest in local resources. Large corporations are currently holding $1.7 trillion offshore, states MarketWatch's Diana Furchtgott-Roth. Lowering fees for these organizations will encourage them to bring business back to the U.S., she says.

Opponents meanwhile don't agree lower tax rates will encourage hiring at home. Unemployment rates were the lowest in history during periods of low corporate tax rates, states.

Whether or not they support the increase in tax levels for large companies, HR professionals should consider how potential increases and decreases in employment numbers both locally and abroad affect hiring and talent management practices. In addition, as the fiscal cliff deadline approaches, it's a good idea for companies to plan for consequential payrolling changes.

Related Articles