• Kudlow's comments followed more grim economic news from the government
  • He said cutting the corporate tax for companies that bring jobs home could "torque" the economy
  • He cast down on another massive coronavirus relief plan, saying the U.S. can't spend its way out of the current situation

White House chief economic adviser Larry Kudlow on Friday floated the idea of cutting corporate taxes in half for companies that bring jobs back from overseas. Kudlow suggested reducing the corporate tax rate of 21% to 10.5% for “corporations that are coming back home.”

The remarks followed a presidential executive order Thursday to build up the national stockpile and to bring production of essential supplies back to the U.S.

"Maybe, this is a maybe, maybe the corporate tax of 21 percent should be lowered by 50 percent to about 10.5 percent for corporations that are coming back home," he told Fox Business. "Maybe that's something to look at."

Republicans slashed the corporate tax rate from 35% to 21% in 2017. Kudlow said cutting it further could help create “incentive-oriented torque for the economy,” which has suffered badly amid the coronavirus pandemic.

Government reports Friday showed industrial production falling by the most in a century, utilization capacity dropping below Great Recession levels and consumer spending dropping a record 16.4%. Initial unemployment claims released Thursday pushed to 36.5 million the number of Americans who have filed for jobless benefits since mid-March.

“We're not going to spend our way out of that," Kudlow said.

The comments came as the House considered a $3 trillion coronavirus relief bill that would more than double packages that already have been adopted to mitigate the economic damage inflicted by stay-at-home orders that shut down the economy.

Federal Reserve Chairman Jerome Powell said earlier this week spending big is what is needed to prevent a prolonged recession or a depression that could result in permanent economic damage.

President Trump has suggested a moratorium on payroll taxes to stimulate spending to increase take-home pay although critics note that would do nothing for people who have lost their jobs. Kudlow said another possibility is cutting the capital gains tax.