The President’s top economist, Kevin Hassett, claims that cutting the corporate tax would benefit the American worker too as wages would rise nationwide. The economist made the statement Monday during a congressional hearing regarding the tax cuts proposed by the Republicans.
According to the assessment the income for a household could jump by 43,000 to $7,000 per year. President Trump is strongly backing the corporate tax cut along with the GOP leadership in Washington D.C.
The GOP wants to bring the tac to 20 percent from 35 percent. Other economists have confirmed that corporate taxes in America are disproportionately high when compared with Europe. This is why many U.S. companies would rather move operations overseas.
Experts also disagree with the Trump administration over the claim that a tax cut for corporations would lead to an increase in wages. They called the assessment overly optimistic.
Trump Embraces the Idea
Nevertheless, despite experts’ objections, Trump is touting the idea during his campaign-like speeches. Last week, he told Pennsylvania workers that the proposal would give American workers a $4,000 rise. Trump based his arguments on imput from the Council of Economic Advisers.
The council however is led by Hassett who has often argued that high coporate taxes can only hurt the American worker. He claims that there is a direct association between low corporate taxes and high wages,
Hassett’s report, however, does not analyze the entire GOP proposal for a tax reform. The plan lacks key details such as the level of income needed for a tax bracket, the criteria to qualify for lower tax rates, and measures to prevent corporations from shipping profits to foreign countries where taxes are considerably lower than in America.
The plan includes one key detail – lowering the corporate tax rate – which Trump said won’t be brought to the negotiation table.
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