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Tags: larry kudlow | wages | corporate | taxes | economy

Larry Kudlow: If You Want to Raise Wages, Cut Corporate Taxes First

By    |   Friday, 03 November 2017 01:28 PM EDT

Economic guru Larry Kudlow wasn’t too impressed with the employment-data rebound because of stalled wages.

However, the Newsmax Finance Insider has an easy fix for the problem.

“You want to raise wages you want to raise wages? Cut business tax rates,” he said on CNBC.

U.S. job growth accelerated in October after hurricane-related disruptions in the prior month, but a sharp retreat in annual wage gains and surge in the number of people dropping out of the work force cast a cloud over the labor market, Reuters reported.

Nonfarm payrolls increased by 261,000 jobs last month as 106,000 leisure and hospitality workers returned to work, the Labor Department said in its closely watched employment report on Friday.

Some aspects of the report, however, were downbeat. Although the unemployment rate fell to near a 17-year low of 4.1 percent, it was because 765,000 people dropped out the labor force.

Average hourly earnings slipped by one cent, leaving them unchanged in percentage terms, in part because of the return of the lower-paying industry workers. That lowered the year-on-year increase to 2.4 percent, which was the smallest since February 2016. Wages shot up 0.5 percent in September, lifting the annual increase in that month to 2.9 percent.

“This is a very weak number,” said Kudlow, a Newsmax Finance Insider, radio talk-show host and CNBC senior contributor explained to CNBC.

“This doesn't argue for Fed tightening," said Kudlow, who served as the Trump campaign's senior economic adviser. "This argues for lower business tax rates,” which would eventually enable businesses to pay workers higher wages, said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.

President Donald Trump seeks to cut the corporate tax rate to 20 percent from 35 percent, reduce tax rates on individuals and end certain popular tax breaks, including deductions for state and local taxes and half the interest deduction on new mortgages.

“Instead of tightening, cut tax rates. That's what this report is suggesting," said the radio host of "The Larry Kudlow Show" and author of "JFK and the Reagan Revolution: A Secret History of American Prosperity," written with Brian Domitrovic and published by Portfolio.

To be sure a U.S. Republican tax bill unveiled on Thursday offers big multinational companies more benefits than minuses, and could free up extra cash for investments, dividends or improving balance sheets.

The measure, which faces a long road ahead with final approval by Congress uncertain, would slash the corporate tax rate, a change U.S. companies have been seeking for years, Reuters reported.

The 429-page tax bill would be the largest overhaul of the U.S. tax system since the 1980s.

It would cut the corporate rate to 20 percent from 35 percent, reduce tax rates on individuals and end certain popular tax breaks, including deductions for state and local taxes and half the interest deduction on new mortgages.

It would also create a new 10 percent tax on U.S. companies’ foreign subsidiaries and impose a 20 percent tax on payments that foreign businesses operating in the United States make from their American operations.

(Newsmax wire services contributed to this report).

© 2022 Newsmax Finance. All rights reserved.


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Larry Kudlow: If You Want to Raise Wages, Cut Corporate Taxes First
larry kudlow, wages, corporate, taxes, economy
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2017-28-03
Friday, 03 November 2017 01:28 PM
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