Under the Trump administration, the corporate tax rate was cut from 35% to 21%. Republicans argue that this incentivizes American companies to keep their investments in the U.S to create more jobs. Democrats argue that loss in revenue will result in hurting more Americans than it will supposedly help.
Former U.S. Vice President Mike Pence (R) joins Yahoo Finance Live for an exclusive interview to outline his economic plans, if elected in 2024. Pence states that he would not only "make the Trump-Pence tax cuts permanent" but to extend those tax cuts by taking a "hard run at getting to a 15% corporate tax rate."
To see the full interview with former Vice President Mike Pence, click here.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video transcript
- Let me ask you about fiscal responsibility. There are a couple of factors there. One is tax cuts, which reduce federal revenue. Republicans did that in the Trump tax cut law that went into effect in 2018. And then they're spending. This is going to come back, again, because some of those Trump tax cuts are supposed to expire at the end of 2025. I believe you want to extend those tax cuts. Those are mostly tax cuts for individuals, but then you give up federal revenue. So you make the federal revenue problem worse. How do you address that problem?
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MIKE PENCE: Well, we worked hard to pass the largest tax cuts and tax reform in American history back in 2017. And the economy boomed. And frankly, check the record. Federal revenues went up as they almost invariably do, more than 40% increase in federal revenues in some categories. So I'm confident that step one to getting this economy back on track is to make-- make the Trump Pence tax cuts permanent, which, as you point out, do go away at the end of 2025.
The other is I think we need to take a hard run at getting to a 15% corporate tax rate in this country. We tried to do that in the beginning. Ultimately, we settled out north of 20%. But-- but I really do believe to put American businesses at an advantage for attracting capital, and investment, and creating jobs here in our country.
We ought to drive down that corporate tax rate. But lastly, the last thing we should ever do is raise taxes. And people deserve to know that Donald Trump is actually talking about a 10% tariff on all imports into the United States of America. I think it would be the worst possible time to impose what could be one of the largest tax increases in history, raising the cost of goods at the retail level for Americans, raising the cost of input and manufacturing.
I mean, now more than ever, we need to lower taxes. We need to balance budgets. And ultimately, we need to put our nation on a path of fiscal solvency by having leadership that's willing to engage the American people on reforming the real drivers of federal spending, which are entitlements and mandatory spending at the federal level.