Tags: Financial Markets | Larry Kudlow | Donald Trump | Jared Bernstein | tax reform

Larry Kudlow: Economic Growth Is 'Mother of All Pay-Fors' in Tax Debate

By    |   Tuesday, 25 April 2017 02:55 PM

Larry Kudlow, the veteran financial guru and former economic adviser to President Ronald Reagan, said tax cuts will pay for themselves as they help to trigger strong U.S. growth.

“The mother of all pay-fors is economic growth,” Kudlow said on CNBC. “We need to lower marginal tax rates on large and small companies, we need to pick up repatriation, we need to go for immediate expensing for new investment. That will increase growth.”

Kudlow faced off against Jared Bernstein, a former chief economist to Vice President Joe Biden, in the televised discussion of President Donald Trump’s tax proposals, which are due to be released this week. The president ordered White House aides to write a plan that cuts the corporate tax rate from 35 percent to 15 percent, even if that means an increase in the federal deficit, according to press reports.

Kudlow was an economic adviser to the Trump campaign and helped to shape its tax proposals.

Treasury Secretary Steven Mnuchin said Monday lower taxes would generate so much growth that the deficit wouldn’t rise, echoing what Kudlow has said since he worked in the White House in the 1980s.

“The tax reform will pay for itself with economic growth,” Mnuchin said at a White House news briefing.

Kudlow said a conservative 3 percent estimate of yearly annual growth would boost tax revenue by $4 trillion over 10 years. The U.S. economy has grown by 3.2 percent a year on average since 1947, but never exceeded 3 percent during the Obama administration.

“This is going to give tremendous confidence and I think they can get a deal done at least on the business side in three or four months,” Kudlow said in comparing the likelihood that Congress will cut business or personal income taxes first. “That's what I believe.”

Kudlow is 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.

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Larry Kudlow, the veteran financial guru and former economic adviser to President Ronald Reagan, said tax cuts will pay for themselves as they help to trigger strong U.S. growth.
Larry Kudlow, Donald Trump, Jared Bernstein, tax reform
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2017-55-25
Tuesday, 25 April 2017 02:55 PM
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