From CNBC:

The National Association of Business Economics’ (NABE) quarterly business conditions poll published in January 2019, a year after Trump's tax cuts, found that while some companies reported accelerating investments because of lower corporate taxes, 84 percent of respondents said they had not changed plans.

Why would companies change their investment spending plans in response to profit tax cuts? Aren't those cuts sunk-gains (opposite of sunk-cost)? I get why they would if the cuts were on per-unit capital taxes, but I don't think they were.

I do get why cuts on wage taxes would increase hiring.

But my main question is, where does the money from tax cuts on corporate profit go? To investors? To finance business growth and development? Elsewhere?

closed as off-topic by Ganesh Sittampalam Jun 29 at 7:52

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  • "Questions on economics are off-topic unless they relate directly to personal finance." – Ganesh Sittampalam
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  • 1
    I think this would probably be on-topic for economics.stackexchange.com, so you could repost there, or I'll migrate it if you want (flag and ask for that to make sure we see the request). – Ganesh Sittampalam Jun 29 at 10:39
  • Bonuses and C suit salaries usually – Stian Yttervik Jun 29 at 14:22

Tax cuts reduce total expenses, leaving the tax payer with a greater share of its profit. There are no specific requirements on how to use a windfall from tax cuts. Each tax payer can make its own choices with it.

  • I get that there are no requirements, but I'm more asking about generally what corporations do with the extra money from tax cuts on profits. Surely they don't burn it? – Murey Tasroc Jun 29 at 7:39
  • They do whatever they like with it. Increase salaries, provide bonuses, R&D, donations, special dividends, free lunch for customers, etc. – Lawrence Jun 29 at 8:12
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    @MureyTasroc they do exactly the same that they do with the other money, as "money from tax cuts" is exactly the same that "money". If you have two jobs, you may use the extra money supply to buy more things, but it makes no sense to ensure that "the money to buy X comes from job 1 and the money to buy Y comes from job 2". – SJuan76 Jun 29 at 8:53

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