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Former White House economic advisor talks tax reform and corporate investment
tags: taxes
Eli Dile   on Wednesday, June 20, 2018 at 12:00:00 am

By Jasmine Latiolais, IEDC intern, University of Texas at Dallas

With the Tax Cuts and Jobs Act now law, what can economic developers expect in terms of job creation and investment? A lot, according to Gary Cohn, former director of the National Economic Council and former chief economic advisor to President Donald Trump. Cohn discussed corporate America’s view of the booming U.S. economy at the Washington Post last week.

To Cohn, reforming the corporate tax rate was essential for global competitiveness.  “We shouldn’t be in a country where we’re encouraging people to move corporate headquarters, jobs, and income outside of the United States by starting with this huge disadvantage of charging companies 35 percent tax rates,” Cohn said.

Cohn believes tax reform will help communities in two major ways. First, companies will have more money to invest in expansion and workers’ salaries. Second, jobs will come back to the United States thanks to the lower cost of doing business. ”We’re trying to get companies that were incentivized to move offshore to build plants in the United States, hire people in the United States, and grow wages in the United States,” Cohn said.

Despite the falling unemployment rate, Cohn believes the economy is still underperforming on wage growth. However, the fact that there are more vacant jobs than individuals looking for jobs means paychecks will inevitably grow, he said.

Critics of the tax cuts point to the lack of results for the middle class, but Cohn argued the business cycle is the culprit here. Tax reform was instituted in December, and it takes time for firms’ capital expenditures to go from an idea to a plan to execution. Cohn believes it will take time for the results of tax reform to manifest in increased firm investment, but he is optimistic.

Watch the full discussion with Gary Cohn to hear his views on trade, CEOs entering public service, and more.

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