Larry Kudlow, senior commentator for CNBC and former economics adviser to President Ronald Reagan, said President Donald Trump can make a push for tax cuts this year even if his popularity wanes.
“He's [Trump] always had an advantage on the economy and I know a lot of people that may not like him, but like the idea of tax reform and regulatory reform and infrastructure. That shows up in all the polls,” Kudlow said on CNBC. “I still believe the tax cut this year is possible.”
Trump campaigned on promises to cut taxes and regulation while spending more on roads, bridges and airports to boost job growth. His presidency has been dogged by investigations into connections between Russia and his campaign staff. Trump's approval rating reached a new low of 38.6 percent this month, while his disapproval rating rose to a record 56 percent, according to Real Clear Politics.
During the campaign, Kudlow and economist Stephen Moore advised Trump on an economic plan to spur a faster expansion. That plan included tax cuts for businesses to make the U.S. more competitive with other countries.
“Lower the corporate tax rate from 35 percent to 15 percent. Grant immediate expensing for new business investment. And establish a one-time 10 percent rate for the repatriation of offshore cash,” Kudlow said he and Moore recommended to senior White House officials last week. “It's a simple tonic that will restore capital formation, productivity, real wages and economic growth. And, in terms of political expediency, it's practical. It's about getting done what you can get done.”
Kudlow said he’d like to see some kind of tax reform get done before Congress leaves for its August recess.
“There is widespread agreement in Washington, D.C., about the need for a business tax cut,” Kudlow said. “And legislators can legally and technically attach corporate-tax-rate reduction to the health care reform bill in reconciliation in 2017.”
Washington's budget rules say lawmakers first have to pass an overall fiscal blueprint called a budget resolution before focusing on annual spending bills. This year, that budget plan is a key step in advancing legislation to overhaul the tax code, a top GOP priority.
Republicans are split into three camps on spending: defense hawks who want more money for the military than proposed by Trump; pragmatists who support domestic programs; and conservatives who back Trump's plan to cut domestic spending while boosting the Pentagon’s budget.
“Russiagate. Comeygate. Whatever-the-media-invents-today-gate. These only distract from the real reasons Donald Trump was put in office and congressional Republicans were given one more chance,” said Kudlow, the author of "JFK and the Reagan Revolution: A Secret History of American Prosperity," written with Brian Domitrovic and published by Portfolio. “American voters want the policy results that will deliver a return to economic prosperity.”
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