White House Pitches Corporate Tax Cut As Win For Workers
The Trump administration said in an analysis released on Monday that middle-class Americans would see incomes eventually rise more than $4,000 if President Donald Trump’s corporate tax cuts were enacted, seeking to counter Democratic criticisms that its tax proposals overwhelmingly benefit the rich.
The White House and top Republicans in Congress have released a framework for tax reform that lacks details but is intended to serve as a guidepost for congressional committees that are crafting tax legislation.
Trump has said he would like to see the U.S. corporate income tax rate reduced to 20 percent from the current 35 percent rate.
An analysis by the White House Council of Economic Advisers said lower corporate taxes would incentivize companies to invest in new machines that would require more skilled workers. Companies would then pay higher wages to these skilled workers.
Kevin Hassett, chairman of the CEA, told reporters in a conference call that those benefits would take five years to fully “phase in.”
Hassett also said lower corporate rates would give companies incentives to build plants in the United States, rather than overseas.
According to the analysis, middle-class earners would see incomes rise $4,000. Under Hassett’s explanation of the timing, the full increase would be realized in five years.