Americans will earn $4,000 more annually with 20% corporate tax rate, Trump economic advisor says
CEA Chairman Kevin Hassett discusses how Trump tax cuts could impact working families in the U.S.
President Trump’s corporate tax plan would put an extra $4,000 into the pockets of America’s working families, Kevin Hassett, chairman of the Council of Economic Advisors, told FOX Business.
Foreign countries with a low corporate tax rate see higher demand for jobs, according to Hassett.
“There’s a big literature that looks at how lots of other countries have done the same thing and how their wages responded and we take a very conservative edge to that literature, like the low-end estimates, applied the Trump tax plan to it, and it’s going to increase wages for American workers by about $4,000,” Hassett said to Stuart Varney on “Varney & Co.”
According to the Council of Economic Advisors, recent wage growth experience of the 10 lowest and highest taxed Organization for Economic Co-operation and Development (OECD) countries revealed an “extraordinary” difference between U.S. wages and the wages of lower-taxed countries.
“They are about 3% [higher] per year and so if you take even half of that growth difference… very quickly you get a pay difference that’s much bigger than $4,000 over time,” he said.
The president has proposed to reverse the current offshore model and lower the corporate tax rate to 15%, but in order for American workers to see extra income, Trump would need to drop the rate to 20% in Hassett’s opinion.
“Twenty percent is a really good rate. It would have a dramatic effect on America’s workers and that’s not just hypothesizing, it’s not ivory tower models, it’s hard facts, it’s data, it’s analysis,” he said.