A comprehensive global study released today challenges the long-standing claim that higher corporate taxes are bad for employment. A research team, led by economist Agustina Gallardo, found no clear link between lower corporate tax rates and improved employment rates. In fact, the data reveals countries with stronger corporate tax systems tend to have higher levels of formal employment and more equitable income distribution. The global data examined in the research shows: 

-       Cutting corporate taxes doesn’t create jobs. The study finds no consistent evidence that lower corporate tax rates lead to higher employment. In contrast, countries with strong, well-enforced tax systems often maintain high levels of formal employment despite having higher corporate tax rates. 

-       Fair corporate taxation supports workers. Countries with higher corporate tax revenues allocate a greater share of national income to workers, improving the balance between labour and capital. 

-       Tax dodging harms labour markets. When multinationals shift profits offshore, it not only drains public resources but weakens workers’ bargaining power and suppresses wages. 

Why this matters now 

Over the past two decades, corporate profits have surged while wages have stagnated. Research from the IMF outlines how profits and markups have grown far faster than worker incomes — with corporations capturing a larger share of economic growth. 

At the same time, statutory corporate tax rates have declined across all income groups. While some multinationals claim they are paying more in taxes, the share of overall tax revenue contributed by corporations has fallen, shifting the burden onto workers and damaging public services. This decline has been driven by intense corporate lobbying: recent research by Public Citizen in the US showed in 2024 there were 11 tax lobbyists for every single member of congress 

Without reform to align tax policy with rising corporate profitability, this imbalance will only deepen. 

This research strengthens the case for international tax reforms that unions have long called for — including a 25% global minimum effective tax rate, public country-by-country reporting, and unitary taxation of multinationals. 

The research was developed by the Network of Unions for Tax Justice in close coordination with leading experts and trade unionists from ICRICT and the ITUC. 

Read the full report here (EMBARGOED UNTIL JUNE 5) 

Read the blog version: (EMBARGOED UNTIL JUNE 5) 

Quotes responding to the research: 

“For too long, corporations have used the threat of job losses to dodge their tax responsibilities. This research powerfully exposes that myth. Countries with stronger corporate tax systems not only have better-funded public services, but also more formal, secure jobs—especially for women and young workers. Fair taxation is not just about justice—it’s about creating the economic foundations for decent employment and inclusive growth.” — Jayati Ghosh, Professor of Economics, University of Massachusetts Amherst; Member, ICRICT 

“Workers have long suspected that slashing corporate tax doesn't create jobs. This research shows that instead it creates inequality, as revenues flow out of our public services and into tax havens and the pockets of shareholders and billionaires. Users of public services feel the consequences every day: understaffed hospitals, packed classrooms and higher energy costs. Politicians must stop parroting corporate scare tactics – funding quality public services through fair corporate taxes is good for employment, good for the economy and good for public services."  — Daniel Bertossa, General Secretary, Public Services International (PSI) 

“This study reinforces a crucial truth: fair corporate taxation is essential for sustainable development. Low and volatile corporate tax revenues undermine governments’ ability to invest in jobs, health and infrastructure. We need international tax rules that align profits with real economic activity—starting with effective tax rates and unitary taxation—to stop the erosion of our public finances and rebuild economies from the ground up.” — José Antonio Ocampo, Former Minister of Finance, Colombia; Member, ICRICT 

“This research cuts through the corporate spin. It shows that countries with fair and well-enforced corporate tax systems — where multinationals actually pay what they owe — tend to have more formal jobs and a fairer share of income going to workers. For unions fighting for tax justice, this is the evidence we need to push for real reform that puts workers first. — Séverine Picard, Network of Unions for Tax Justice   

For further comment, contact: spicard@progressivepolicies.eu, Coordinator of the Network of Unions for Tax Justice