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Larry Kudlow on Corporations |
KUDLOW: I don't think we will be activist, but we are laying down some conditions, as I think you know, no stock buybacks, no executive compensation increases, things of that sort. You're either for economic security or national security. You cannot run a country with a vibrant economy like ours without the airline channels. I think, in return for direct cash grants, which is what the airlines have asked for, I see no reason why the American taxpayer shouldn't get a piece of the rock.
Q: Do you worry that some of this assistance has people making more money to stay home than they would be making on the job?
KUDLOW: We have to do whatever it takes to keep people going.
KUDLOW: Senator Rick Scott of Florida, very smart guy, made an interesting proposal. He said, look, why don't we take the tariffs from the China trade and turn those back to the taxpayers in the form of tax cuts?
Q: Isn't all that money going to shore up our farmers?
KUDLOW: We've got room to do that as well. Let's let people keep more of what they earn. Let's let them keep more of what they invest. That's the supply side of Laffer Curve. We believe in that.
The problem is that not only have corporate profits not been invested in long-term capital projects, mainly as a result of tax and regulatory uncertainties, but firms are shifting cash overseas to avoid U.S. corporate tax penalties. You hate to see it, but low tax rates around the world attract cash, in this case almost $2 trillion in American corporate cash. Policymakers should encourage the repatriation of this money with a modest 5 percent penalty rate.