U.S. economic growth rates could double, or even triple, in the next decade if President Donald Trump’s plans produce expected sharp cuts to corporate and personal taxes, according to Steve Forbes, who ran twice for president under a platform calling for a flat tax rate.
Forbes, chairman and editor-in-chief of the eponymous financial news firm Forbes Media, said the speculation around the tax cut plan, with details expected to be outlined this Wednesday, show the scope could be a record breaker.
“In dollar terms, I hope it will be a large tax cut, the largest, the bigger the better. I think it’s going be not so much reforming the U.S. tax code, which is a horror, but simply reducing current tax rates,” Forbes told CNBC’s “Squawk Box” on Tuesday.
“On the business side we have the worst in the world, 35 percent to 40 percent. I think they’re going to try and get that below 20 percent, perhaps 15 percent,” he said. “On the personal side I think you’re going to see tax cuts across the board. And so short term, that may increase the deficit, but a growing economy cures deficits better than anything else.”
While Forbes is correct that the U.S. officially has higher corporate taxes than many industrialized countries, in practice, its largest corporations often use deductions and other maneuvers to pay taxes below official rates or to pay no federal taxes at all.