Trump’s Top Economist Says Corporate Tax Cuts Will Lift Workers’ Wages
The council’s report concludes that if the corporate rate were cut to 20 percent, the median American household would earn $3,000 to $7,000 more than it otherwise would have. The median household earns just under $60,000 a year.
Mr. Hassett said in a conference call with reporters that those gains could be even larger than the calculations suggested, “because America’s broken corporate tax system creates incentives for firms to hold their profits outside our borders.”Another report issued on Monday from three economists at Boston University used an economic model to predict similarly large income gains from the Republican tax framework, though it warned that the plan would likely widen income inequality. That model assumes that the burden of corporate taxes falls almost entirely on workers... Seth Hanlon, a senior fellow at the Center for American Progress think tank and a former economic adviser to President Barack Obama, said Mr. Hassett had “cherry-picked” studies on the effects of corporate taxation on wages.Jason Furman, a professor at the Harvard Kennedy School and a former Council of Economic Advisers chairman in the Obama administration, called Mr. Hassett’s findings “implausible” and noted they were rooted in studies that had not been published in major academic journals.
“This lies outside the mainstream of economists,” he said.