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Larry Kudlow on Corporations

 

 


In return for cash grants, US should have stake in airlines

Q: You are going to be taking equity stakes in the airlines? Is the government going to be an activist shareholder, wanting to tell these companies how to run their businesses?

KUDLOW: I don't think we will be activist, but we are laying down some conditions, as I think you know, no stock buybacks, no executive compensation increases, things of that sort. You're either for economic security or national security. You cannot run a country with a vibrant economy like ours without the airline channels. I think, in return for direct cash grants, which is what the airlines have asked for, I see no reason why the American taxpayer shouldn't get a piece of the rock.

Q: Do you worry that some of this assistance has people making more money to stay home than they would be making on the job?

KUDLOW: We have to do whatever it takes to keep people going.

Source: Fox News Sunday interview of Trump Cabinet , Mar 29, 2020

We believe in supply side Laffer Curve

Q: What about Trump's tariffs on China?

KUDLOW: Senator Rick Scott of Florida, very smart guy, made an interesting proposal. He said, look, why don't we take the tariffs from the China trade and turn those back to the taxpayers in the form of tax cuts?

Q: Isn't all that money going to shore up our farmers?

KUDLOW: We've got room to do that as well. Let's let people keep more of what they earn. Let's let them keep more of what they invest. That's the supply side of Laffer Curve. We believe in that.

Source: Fox News Sunday interview for 2019 Trump Cabinet , Aug 18, 2019

Low tax rates around the world attract corporate cash

I believe slashing the corporate tax rate is the most important pro-growth measure that should be taken. I'd like to see the corporate tax completely abolished. But I'd settle for a 20% rate. (Incidentally, studies show that 70% of corporate tax relief goes to wage earners.) Additionally, investment cash expensing should be given 100% write-offs, all other credits & deductions should be eliminated, and corporate welfare and cronyism should be ended. And let me put a plug in for removing the Ex-Im Bank.

The problem is that not only have corporate profits not been invested in long-term capital projects, mainly as a result of tax and regulatory uncertainties, but firms are shifting cash overseas to avoid U.S. corporate tax penalties. You hate to see it, but low tax rates around the world attract cash, in this case almost $2 trillion in American corporate cash. Policymakers should encourage the repatriation of this money with a modest 5 percent penalty rate.

Source: National Review, "Recovery: 5 Years", by Lawrence Kudlow , Jul 15, 2014

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