Kudlow: Time for a tax cut
Larry Kudlow thinks it’s time for Team Obama to consider a different path:
Fred Smith, the CEO of FedEx, does not have a Nobel Prize in economics. But he founded from scratch a gigantic global transportation and delivery company that has employed tens and tens of thousands of workers, something the Nobelists have never done. And Smith argues that the best job-creating measure would be a significant reduction in the corporate tax rate and a move to full expensing for business-investment tax write-offs. He’s exactly right.
Japan intends to cut its corporate tax rate. So does Great Britain. But the U.S. corporate tax rate of 35 percent, or 40 percent when states are included, is not even remotely competitive anymore. So why aren’t people talking about the economic benefits of unleashing business power? The rapidly growing Asian economies treat capital and business better than they’re treated in the United States. Same for Europe. What are we waiting for?
Me: Even Krugman-ite Democrats — folks more worried about jobs than deficits — should support this. Lowering taxes is the one form of “stimulus” that might get GOP support. Might this mean a bigger deficit in the short run? Perhaps, but I see little evidence that markets are too concerned right now about red ink.