Senate Republicans on Tuesday reached a tentative budget deal that would allow $1.5 trillion in tax cuts over the next decade – a move that Former Reagan economic advisor Art Laffer says would pave the way for President Trump’s desired 15% corporate tax rate.
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“What the $1.5 trillion does…it gives some of the Republicans who really believe in these pay fors an out to vote for the corporate tax cut,” he said. “I don’t want to see it go to 20%, I want to see it go to 15%.”
The last time the top corporate tax rate was cut was in 1988, when it went from 40% to 34%.
Laffer explained how lowering the corporate tax rate, which is now set at 35%, to 15% will help grow the economy.
“If you cut that tax rate to 15%, it will pay for itself many times over, not only in economic growth but in reduce sheltering, reduce fraud, tax evasion, bringing businesses back from abroad, secondary tear-sharing, quaternary taxes, state and local taxes. All of those will increase in addition to economic growth, jobs, output and employment. So this will bring in probably a trillion and half net by itself,” he told FOX Business’ Neil Cavuto on “Cavuto: Coast to Coast.”