Larry Kudlow and I agree more often than not. I thought Senator Kerry's corporate tax cut plan was political genius. Larry concurs
Senator John Kerry moved to the right of Walter Mondale by proposing a small cut in the corporate tax rate, which he would lower to 33 ¼ percent from 35 percent. In political terms, it's a clever ploy. In economic terms, it merely provides a small offset to the significant tax hikes Kerry proposes on capital formation, where he would slap small businesses, top-bracket taxpayers, dividends, and capital gains.
The Kerry proposal to rollback the Bush tax cuts would raise the after-tax cost and reduce the post-tax investment return on capital by more than 54 ½ percent. Taking out the upper-bracket labor-income component -- which is still investment capital -- the Kerry tax hike would reduce investment incentives by nearly 47 percent and work-effort returns by more that 7 ½ percent. A big hit.