Kudlow floats cutting corporate tax rate in half for companies returning production to US
Republicans cut the corporate tax rate to 21% from 35% in the 2017 tax overhaul
White House economic adviser Larry Kudlow says the U.S. must focus on reopening the economy as coronavirus case numbers are beginning to flatten out throughout the country.
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President Trump's chief economic adviser Larry Kudlow on Friday floated the possibility of slashing the corporate tax rate in half for American companies operating overseas if they shift their production back to the U.S.
"Maybe, this is a maybe, maybe the corporate tax of 21 percent should be lowered by 50 percent to about 10.5 percent for corporations that are coming back home," he told FOX Business. "Maybe that's something to look at."
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The Republican-led tax overhaul slashed the corporate tax rate to 21 percent from 35 percent in 2017. But reducing the rate further could help to create "incentive-oriented torque for the economy," Kudlow said, as the coronavirus outbreak shutters businesses and forces Americans to stay at home.
"We're not going to spend our way out of that," he said, adding: "When we get round to it, in a few weeks perhaps, we will negotiate. I want to put as many growth incentives into this economy."
Other possibilities, he said, include a payroll tax cut to boost take-home pay for workers or a reduction in capital gains taxes. Trump has frequently endorsed cutting payroll taxes, though critics question whether it would provide enough support to out-of-work Americans who are no longer receiving a paycheck.
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In the two months since the pandemic paralyzed the U.S. economy, more than 33 million Americans have lost their jobs, a rate unseen since the Great Depression.
So far, Congress has passed four massive stimulus packages totaling nearly $3 trillion to blunt the economic pain from the virus outbreak. That includes the $2.2 trillion CARES Act signed into law at the end of March, which sent one-time payments of up to $1,200 to Americans who earn less than $99,000.
House Democrats unveiled a $3 trillion relief package on Tuesday that would send another round of $1,200 checks to American adults and children and expand the number of people who are eligible to receive the government aid. The payments would be capped at $6,000 per household.
“We’re talking about that with a number of different people," Trump said earlier this week. "We’re talking about a payroll tax. I want to see various things, but we’re talking about that. We’re negotiating with the Democrats.”