Kudlow to Newsmax TV: Obama's Policies Hurt US Businesses

Thursday, 31 Jul 2014 03:21 PM

By Dan Weil

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President Barack Obama's stance toward business is completely unsatisfactory, says CNBC senior contributor Larry Kudlow, host of "The Larry Kudlow Show" on Cumulus Radio.

Obama's message to business during the 2012 campaign was, "You didn't build that," and he's never really dropped that message, Kudlow told "The Steve Malzberg Show" on Newsmax TV.

"He really doesn't understand the entrepreneurial process or why shareholders want after-tax returns that are competitive," Kudlow said Wednesday. "He doesn't get that. It's outside of his mentality, sort of intellectual grasp."

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That attitude is especially harmful now, Kudlow said.

"Just one time in the weakest economic recovery since World War II, why can't this president defend business and make business more competitive globally?"

Kudlow also explored several specific topics.

Corporate Taxes

"Everybody, including his [Obama's] own people, acknowledges that our tax rates are the worst in the world. Yet they won't engage, they won't negotiate," Kudlow said.

The United States is the only nation that imposes taxes on foreign earnings, he says, and while the top U.S. corporate tax rate is 35 percent to 40 percent, the rate is about 25 percent for the rest of the world, he said.

"We ought to go to 20 percent like Great Britain," Kudlow said. "It's a very tough world out there, and if he [Obama] wants to keep business home, keep them home."

It's understandable that U.S. companies are buying corporations overseas and then domiciling there to avoid onerous U.S. taxes [a process called "tax inversion"], Kudlow said. "You want to bring them home? Get their tax rates competitive and stop taxing overseas profits. It's that simple."

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The White House has adopted the term "economic patriotism" to use the companies executing tax inversions as "whipping boys because they need to get out the Democratic base," Kudlow said.

Obama's own proposals on tax reform are unimpressive, Kudlow said. "For example, he said that there are all these loopholes. Nobody wants to keep the loopholes," Kudlow said.

"You ask any businessman and they'll tell you, just tax me once on my earnings, not including overseas, tax me once at about 20-25 percent, give me full cash expensing for investment. I don't want any loopholes."

Jobs

Kudlow also isn't satisfied with recent payroll growth.

"This is very mediocre stuff," he said. "You've got people dropping out of the labor force left and right . . . Wages are low, hence, consumer spending is highly mediocre."

Meanwhile, "Obamacare throws a wet blanket over business," Kudlow said. "This is the worst business investment recovery since World War II, and it's businesses that create the jobs.

Economic Growth

The 4 percent GDP expansion for the second quarter is nothing to get excited about, Kudlow said.

"I don't think anything has changed. You get a one-time inventory bulge. If you take that out, final sales are only 2.3 percent. That's really the number of GDP growth."

Obama is "so worried about income inequality and [wealth] redistribution that he doesn't really care about a weak economy at home, and he doesn't understand how this affects him [abroad]," Kudlow said.

Editor's Note: Seniors Scoop Up Unclaimed $20,500 Checks? (See if You qualify)

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