Trump Plans More Tax Cuts to Spur Growth and Jobs: Kudlow

Larry Kudlow, Director of the National Economic Council, speaks to the press at the White House in Washington, on Oct. 5, 2018. Nicholas Kamm/AFP via Getty Images

White House economic adviser Larry Kudlow said in remarks at Tuesday’s Republican National Convention that the Trump administration is looking to introduce more tax cuts to spur investment and create jobs as America continues its rebound from a deep recession.

Kudlow said during the second night of the convention that Trump’s economic plan, which he called a “roaring success,” helped fuel the record-long expansion that was cut short by the fallout from the pandemic.

“Inheriting a stagnant economy on the front end of a recession, the program of tax cuts, historic rollback of onerous regulations that crippled small business, unleashing energy to become the world’s number one producer, and free, fair, and reciprocal trade deals to bolster manufacturing, agriculture, technology, and other sectors—the economy was rebuilt in three years,” Kudlow said, speaking of the economic policies that Trump campaigned on in 2016 and then set about implementing when he won.

He credited those policies with driving unemployment down to a record low of 3.5 percent and delivering benefits to all sectors of American society: “Blue collars, African Americans, Hispanics, women—all groups benefited enormously. Everyone was better off—a rising tide lifted all boats.”

This prosperity was cut short by the Chinese Communist Party (CCP) virus outbreak. Lockdowns and business shutdowns decimated the labor market, with 20.5 million jobs lost and the unemployment rate surging to 14.7 percent in April, both post-World War II records.

“It was awful. Health and economic impacts were tragic. Hardship and heartbreak were everywhere,” Kudlow said.

Director of the National Economic Council Larry Kudlow speaks to reporters inside the Brady Press Briefing room at the White House in Washington on Feb. 13, 2020. Tom Brenner/Reuters

Emergency spending and tax cuts were among the policy responses that helped bring the U.S. economy back from the brink, Kudlow said, adding that the nation’s “economic health is coming back.”

Policymakers in government and in the Federal Reserve system took unprecedented actions to blunt the economic impact of the virus, with Congress authorizing around $3.6 trillion in new spending since March and the Fed dropping rates to near zero and exploding its balance sheet to flood markets with liquidity.

“Americans are going back to work. There’s a housing boom. There’s an auto boom. A manufacturing boom. A consumer spending boom,” Kudlow said, listing areas of economic activity that are seeing a rebound. He added, as in many previous statements, that he believes America’s economy can avoid a double-dip recession and instead mount a sharp recovery.

“A V-shaped recovery is pointing to better than 20 percent growth in the second half of this year,” Kudlow said, before previewing further policy moves by the Trump administration.

“Now, looking ahead, more tax cuts and regulatory roll back will be in store—payroll tax cuts for higher wages, income tax cuts for the middle class, capital gains tax cuts for investment, productivity, and jobs,” Kudlow said.

President Donald Trump recently issued an executive order deferring payroll taxes, which he said he would seek to make into permanent tax cuts if re-elected. Trump also said recently that he would like to see the capital gains tax slashed to 15 percent, while his rival in the race for the White House, Democrat nominee Joe Biden, has called for taxing long-term capital gains and qualified dividends at the same rate as income tax, so at 39.6 percent on income above $1 million.

Also, Biden’s planned economic policies, which include raising taxes on people making over $400,000 a year, would increase taxes by $4 trillion over the next 10 years, according to an analysis by the Tax Policy Center.

Kudlow implicitly criticized Biden for his plans to raise taxes as the nation struggles to bounce back from a deep recession.

“In economic terms, folks, this is no time for a $4 trillion tax hike,” Kudlow said. “Coming out of the deep pandemic, who in their right mind would pick the pocket of taxpayers and drain money from their wallets and purses?”

He framed the choice in November as being between pro-growth policies, prosperity, and optimism, “or do you want to turn back to the dark days of stagnation, recession, and pessimism?”