Moody’s Chief Economist Mark Zandi says reforming the tax code should begin with the corporate tax, which he says could be the key to sustainable long-term economic growth. "Let’s lower the corporate tax rate, let’s make the corporate tax system more sane, you know, there’s a lot of things we can do to improve it," he said.
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Zandi believes overall tax reform should be handled in stages, with a priority on change that will grow the economy. “I think a corporate tax cut that’s largely revenue neutral, at least on a dynamically-scored basis, that’s good policy, right, that makes our businesses more competitive,” Zandi told the FOX Business Network’s Neil Cavuto.
What level of growth would he like to see? “Anything better than 2% is acceptable, I’ll take it, you know. Even, you know, corporate tax reform under the best circumstances isn’t going to take you to 3%, and certainly not 4%, but it will take you to 2.2%, 2.3%, but that’s substantial right over a 10, 20, 30 year period, that means real wealth.”
Despite calls to cut the corporate tax rate as low as 15%, Zandi proposes that a smaller cut would be more manageable but could still produce positive economic results.
“The top marginal rate for a business is 35%, there’s no way to take it to 15% right? How are you going to do it? 20% is tough, unless you have border adjustment tax, maybe you don’t want to have that, it’s tough. 28%, that’s doable, manageable, we can accomplish that. And then, let’s see, let’s see how that works out, you know, five-ten years down the road."