For the past four decades, the international community has been in a “race to the bottom”. Different jurisdictions compete to cut corporate taxes in a bid to attract capital and foreign direct investment (FDI), given how globalisation makes it easier for multinational enterprises (MNE) to locate from one country to another. In the early 1980s, the worldwide average statutory corporate income tax rate was slightly above 40%; today it is slightly less than 25%. In the US, corporate tax revenue as a share of GDP has fallen from approximately 7% in 1944 to just 1.1% as of 2019.

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