Higher corporate taxes lead to a decline in private investment: EconPol

Higher corporate taxes lead to a decline in private investment in Germany, shows a study conducted by the EconPol research network. A 1 percentage point increase in local business tax leads to a 3 percent decrease in investment activity. “This means that every additional euro of tax revenue would cause companies to invest two euros less on average,” says Andreas Peichl, Director of the ifo Center for Macroeconomics and Surveys.