Taxes

CEOs raise doubts about Gary Cohn's top argument for cutting the corporate tax rate right in front of him

Key Points
  • Many CEOs did not raise their hands when asked about whether they would increase their capital expenditure because of the GOP's tax reform plan.
  • The CEOs were gathered at an event with Gary Cohn hosted by the Wall Street Journal.
  • There's little evidence to support the claim that tax breaks boost employment.

WSJ Ceo Council Video

A meeting of CEOs might seem to be a friendly gathering place for President Donald Trump's chief economic adviser Gary Cohn, former president of .

But at a gathering of chief executives hosted yesterday by the Wall Street Journal, business leaders called into question one of Cohn's top arguments for slashing the corporate tax rate to 20 percent.

When one of the Journal's editors asked the crowd if they planned to up their capital expenditure if the GOP's tax plan went through, only a smattering raised their hands.

"Why aren't the other hands up?" Cohn asked.

Cohn has said the tax cuts Republicans have proposed will be paid for entirely through economic growth. The cuts are projected to cost at least $1.5 trillion.

"We think we can drive a lot of business back to America, we can drive jobs back to America, we can make ourselves very competitive," he .

National Economic Council Director Gary Cohn
Brendan Smialowski | AFP | Getty Images

There's little evidence to support the claim that tax breaks boost employment numbers.

A National Bureau of Economic Research study published in 2014 found "little evidence that corporate tax cuts boost economic activity" unless implemented in a recession.

Far from being short on cash, corporations are sitting on record amounts.

The informal poll was not the only disappointment for Cohn on Tuesday. Another non-scientific poll conducted at the gathering found that more than half of the CEOs present didn't believe that Congress would pass a major tax bill by the end of the year.

Cohn had previously told reporters that tax legislation would be advanced by the end of the year, calling it a "once in a lifetime opportunity."

WSJ Tweet