Cut Cut Cut Tax Act

A discussion of the growth effects of the Cut Cut Cut Act by Paul Krugman. An excerpt below:

"...most discussion of the growth effects of the Cut Cut Cut Act, such as they may be, focuses on the wrong measure. GDP might go up because lower corporate taxes will draw in foreign capital; but this capital will demand and receive returns, which mean that part of the gain in domestic production is offset by investment income received by foreigners. As a result, GNI – income of domestic residents – will rise less than GDP. And surely, as in Ireland with its leprechaun economy based on low corporate taxes, GNI is the measure you want to focus on."

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