Should-Read: Nick Bunker: What’s going to reduce U.S. corporate savings?: "What, then, is behind the rise in corporate savings?... http://equitablegrowth.org/equitablog/value-added/whats-going-to-reduce-u-s-corporate-savings/

...Looking at research on the trend in the United States, the corporate savings problem seems to be caused less by a corporate tax rate that is “too high” and more by increased consolidation within industries and among shareholders. In the U.S. economy, both industry consolidation and “common ownership” of companies by institutional investors and mutual funds are more and more prevalent. Interestingly, the research by Chen, Karabarbounis, and Neiman finds that declines in corporate taxation actually pushed corporate savings up.

This research, in conjunction with the fact that corporate savings are up in parts of the world where policymakers did reduce corporate tax rates, signals the underlying lack of business investment is not due to the tax system. A tax cut may or may not boost investment, but it alone seems unlikely to unleash this stash of corporate cash in the long run toward more productive investments in the U.S. economy...

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