Another Tax Cut? White House Economic Adviser Larry Kudlow Says It's Under Consideration

President Trump is considering a second round of tax cuts to announce during the 2020 presidential campaign, White House economic adviser Larry Kudlow said Friday.

In an interview on Fox News, Kudlow said no formal process has been set up and no details would be forthcoming, but “we would like to see some middle class tax cuts.”

A Republican tax cut plan would stand in stark contrast to plans by a number of Democratic presidential nomination hopefuls to reverse the most recent tax cuts and raise levies to pay for healthcare and other proposals.

In 2017, the Republican Congress passed tax cuts that trimmed the corporate rate to 21% and lowered individual rates, mostly benefiting the top 1% of taxpayers. Trump predicted the tax cuts would allow the economy to grow by as much as 6% annually, would boost business investment and pay for themselves.

None of those predictions have come true.

Since then the federal budget deficit has ballooned to nearly $1 trillion and most businesses opted to bank the extra cash or buy back their stock rather than make major investments. The Bureau of Economic Analysis put gross domestic product at 1.9% for the third quarter.

Democrats are hoping to make the economy, which has slowed under the weight of the trade war with China and global factors, a cornerstone of the 2020 debate, pushing to increase rates on businesses and the highest-earning Americans.

The U.S. manufacturing sector has slowed to recession levels, with the Institute of Supply Management reporting Friday its purchasing manager’s index at 48.3%, the third month in a row it registered contraction, and GDP growing at 1.6%.

Trump had hoped to return the U.S. to its 1950s manufacturing heyday, but the reality is robots are taking over factories, and high-tech firms and the service-sector are dominating jobs growth, especially healthcare, education and consulting. Investment in things like real estate has been declining for more than a half-century.