American workers would likely get a pay raise if Republicans are able to reduce corporate taxes, argued the chairman of President Donald Trump’s Council of Economic Advisers.
Cutting the U.S. corporate rate via 35 percent to 20 percent would likely provide companies with an incentive to keep their profits in addition to operations in America, which would likely “increase the demand for workers here in addition to drive up wages,” Trump aide Kevin Hassett said Monday on CNBC’s “Squawk Alley” after the White House released its first economic analysis of the GOP tax plan.
The brand new report via Hassett, out Monday morning, projects of which reducing the corporate tax rate to 20 percent will result in a windfall for U.S. workers. He predicted average U.S. household income would likely increase at least $4,000 a year yet could rise as much as $9,000 annually.
Last week, Larry Summers, a Treasury secretary under former President Bill Clinton in addition to an ex-Obama economic advisor, called an early look at the analysis flawed. “The idea of which This specific is actually going to produce a $4,000 increase in wages is actually, I think, an absurdity,” Summers said, arguing of which “record highs” in corporate profits show of which companies don’t need an incentive to improve wages.
In response to Summers, Hassett said, “This specific’s hard to respond to something where he says This specific’s an absurdity, yet he doesn’t say why. in addition to I can tell you he doesn’t say why because he doesn’t know why.”
Hassett also said of which over the last eight years, under former President Barack Obama, there’s been a “clear structural break” between corporate profits in addition to wages. Corporate profits have risen more than 10 percent yet real wage growth has risen a half a percent a year, he said.
U.S. corporations are paying workers abroad, “instead of here,” Hassett said.
Regarding the effective tax rate, Hassett didn’t say what This specific would likely be under the GOP plan. yet he said the cost of capital will drop “by about 11 percent.”
The Senate voted last month to approve Hassett as chairman of Trump’s economic policy agency. Unlike under Obama, the position is actually not from the presidential Cabinet.
Before his appointment, Hassett was an economist at the American Enterprise Institute in addition to senior economist at the Federal Reserve. He had also been a consultant to the Treasury Department in addition to an advisor on presidential campaigns, including Republican Mitt Romney’s unsuccessful run in 2012.