Cutting taxes is a largely ineffective strategy for attracting foreign investment

Closer co-operation between eurozone members on tax policies might undermine the attempts of some European states to use tax competition as a method for attracting investment. Taking the case of Ireland and the Netherlands, Aidan Regan assesses the link between low corporate taxes and investment, arguing that the impact of tax cuts has largely been overstated. In some cases high tax rates might actually increase the potential for investment if the revenue is used to improve infrastructure, or produce a more educated workforce.