Former Council of Economic Advisers Chairman Jason Furman said Monday the U.S. doesn’t have enough money to pay for President Donald Trump’s proposed reduction of the corporate tax rate.
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“I don’t think we can afford a 20% [corporate rate],” Furman told Maria Bartiromo on “Mornings with Maria,” adding that a 25% corporate rate would give the U.S. a competitive edge and cost less.
The U.S. corporate tax rate is currently one of the highest among developed countries at 35%, compared to the global average of 22%. Furman also suggested switching from a corporate tax system to a value-added tax (VAT), which uses a sales tax system.
“I think there’s an argument for switching from a corporate tax to something like a VAT. That’s not what this bill does though. All these countries that lowered their corporate tax rates, they didn’t do it by creating the types of huge deficits that this would be leading to here,” he said.