Taxes

Lower corporate rates can drive US economic growth, tax reform advocate says

Norquist on taxes, Trump & Reagan
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Norquist on taxes, Trump & Reagan

Donald Trump's plan to slash corporate taxes will increase American competitiveness in the global economy, one tax reform advocate said.

Grover Norquist, president of Americans for Tax Reform, told CNBC's "Squawk Alley" on Thursday that the president-elect's tax reform plan will drive the U.S. economy to grow 4 percent.

Norquist's remarks echo those of Steven Mnuchin, Trump's pick for Treasury secretary, who told CNBC on Wednesday that tax reform will help drive U.S. economic growth. Mnuchin said a major goal for the incoming administration is to reduce the corporate tax rate to 15 percent, from 35 percent.

Norquist contended Thursday that the the combination of a lower corporate tax rate as well as full expensing for business investment will lift the economy.

"These are two powerful drivers of new investment, job creation and increasing productivity, which allows wages to rise," he said.

Norquist also called for tax reform that allows for repatriation of foreign earnings. He said that the only reason why there is $2 trillion "locked overseas [is] because of our stupid tax laws." As for how that repatriated cash is spent, Norquist said that the companies "can invest it best" and that buybacks aren't a bad idea.

"A buyback is investing in your own company. That's certainly an awfully good sign if companies are saying 'I think the economy is so good I want more of my stock,'" he said.