White House economic adviser Larry Kudlow said on Tuesday that President Donald Trump wants to see a 7.6% cut in the U.S. payroll tax, hoping it will help staunch economic pain caused by the COVID-19 pandemic.
"I know the president wants to see those folks that go back to work to get a 7.6% cut in their payroll tax, so their after-tax take-home pay goes up," Kudlow said in an interview with Fox Business Network.
Trump is looking to the tax code to help the economy regain ground lost when states shut down virtually all economic activity in hopes of containing the spread of the novel coronavirus. Kudlow said those steps could include a payroll tax holiday, a capital gains exclusion for several years, and a tax deduction for business spending at restaurants.
The president is also considering incentives for companies to move back to the United States, which Kudlow termed "onshoring," primarily full expensing for return moves, a cut in the corporate tax rate, and a targeted tax credit.
"We're going to look at the numbers and assess what we think is necessary and not necessary," Kudlow told reporters at the White House after his interview.
Kudlow has brought up these ideas over the last few weeks as states begin to reopen their economies and the Republican White House looks for ways beyond spending to help heal coronavirus-induced economic pain. Federal Reserve Governor Jerome Powell and the Democratic-led U.S. House of Representatives are pushing to boost federal spending and send more cash directly to individuals and families.
"I'm being vague because I can't commit," Kudlow told reporters. "I'm just saying: Here's what the president has talked about, here are some of the items he has talked about."