White House chief economic adviser Larry Kudlow on Friday proposed cutting the corporate income tax rate in half to attract overseas companies to move their operations stateside to help the economy recover from the pandemic shutdowns.
“Maybe the corporate tax rate of 21% should be lowered by 50% to about 10.5% for corporations who are coming back home. Maybe. That’s something to look at,” Kudlow said in an appearance on Fox Business.
He reasoned that the timing might be right to attract foreign business to the United States since the nation can no longer trust foreign countries like it did in the past.
“We cannot rely as extensively as we have in the past with respect to overseas countries, including China. It still has to be held accountable,” he said.
Congress slashed the corporate income tax rate from 35% to 21% in the 2017 tax reform bill at a time when Republicans controlled both chambers and the White House. House Democrats, who now control the House, opposed the tax overhaul bill and are not likely to support further cuts to the corporate rate.
Kudlow’s remarks come as the House later on Friday is expected to pass a coronavirus relief bill costing $3 trillion. Washington has so far enacted four coronavirus relief bills, and deficits are projected to skyrocket because of it.
Kudlow said the White House wants to see how the first four bills affect the recovery before moving forward on another relief package.
“We’re not going to jump in. As everybody said — Secretary Mnuchin, myself, others: We’re not going to jump in on a gigantic negotiation right now. We’re not going to spend another $3 trillion since we don’t know what the last $3 trillion has actually produced. We have to assess that,” he said.
