Lowering payroll taxes is not a high priority in the White House's plans for "tax cuts 2.0," but adjusting the earned tax credit for low to moderate earners and keeping the child tax credit, which was doubled to $2,000 in 2018, are being eyed as ways to help aim at "even faster economic growth" for President Donald Trump's second term, National Economic Council director Larry Kudlow said Friday.
"We want to aim this at middle-class tax relief," Kudlow told Fox Business Network's Stuart Varney. "We want to aim this at even faster economic growth going out in the president's second term."
Kudlow said he does not know where talk of lowering payroll taxes has come from, as "it's not high on the list," but there are many other issues for the middle class, including in income tax brackets, the earned income credit, and more.
"We will certainly keep the child tax credits, the 'kiddy tax' credits and so forth, and we might want to make some things permanent that weren't permanent on the individual side and also on the corporate side. I'm thinking especially of expensing, immediate expensing, which is a very powerful tonic for business investment."
According to reports, the White House is working to push out a massive financial package during the election year, and Kudlow told Varney that if Americans "re-elect President Trump" they will "get lower tax rates and lower tax burdens."
"You'll also get a continuation of the opening of the energy markets that have made us the world's largest producer," said Kudlow. "We don't need the Middle East anymore. You'll also get additional trade activity, negotiations, and trade deals that would open markets and end unfair trading practices by so-called trading partners."
The China trade deal, with its signoff on a first phase earlier this week, is "historic," said Kudlow, and additional work is being done in Europe.
"We are talking to the Japanese, and we have a pretty good Japanese trade deal," said Kudlow.
The U.S.-Mexico-Canada (USMCA) agreement is also vital, as it will add hundreds of thousands of new jobs and billions in foreign investment into the United States, said Kudlow, as well as "three-quarters of a percentage point to the GDP ... it helps all across the board ... helps farmers, it helps manufacturing, automobiles, it also helps technology and investment."
The China trade deal will also be a vital part of the U.S. economy moving forward, said Kudlow.
"We had estimated something like a half percent of GDP added on per year, and that will begin in 2020," he said. "The export numbers by themselves will be a major help in the farming sector but also the manufacturing sector. We targeted $40, $50 billion of farm exports by lowering trade barriers as well as tariffs. Let's not forget $75 billion in U.S. manufacturing exports to China is a key part of the deal, along with $50 billion in energy and I think about $40 billion in services mostly financial services, so, you know, if these export transactions are completed in the next couple of years, that stimulates the farming sector, the equipment sector, the technology sector.
"I've said a million times, automobiles, technology, software, we are number one competitive in the world."
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