A combination of tax cuts for working Americans and U.S. corporations as well as deregulation would unleash a wave of investment and job creation, Yum Brands CEO Greg Creed told CNBC on Tuesday from the sidelines of the fast food giant’s meeting of global leaders in Jacksonville, Florida.
Creed estimated Yum’s blended corporate tax rate — due to being in 135 countries with KFC, Pizza Hut and Taco Bell locations — at about 26 to 27 percent.
The U.S. federal corporate tax rate stands at 35 percent, one of the highest among industrialized countries, though few companies actually pay that.
President Donald Trump and Republican leaders on Capitol Hill want to cut the corporate rate. The House plan calls for a reduction to 20 percent, with a border adjustment tax on imports to help pay for it. The White House has been rather noncommittal on the border tax provision, which has been a lightning rod. Critics say the border tax would lead to high prices for consumers.
Meanwhile, Trump and lawmakers also want to cut taxes for individuals. The blueprint from House Republicans boasts “unprecedented simplicity and fairness.”
“I don’t think anyone at my level needs a tax cut,” Creed said. “But if we can deliver tax cuts to the middle income in the U.S. and below, people will spend money.”
“If you have lower- and middle-income tax cuts, corporate tax cuts, degradation, I do think you will see a dramatic increase in investment and a dramatic increase in job creation,” the Yum chief said.
Creed said he thinks U.S. economic growth could go to 3 percent. “You’ll see a dramatic jump in growth.” But he sees the 4 percent expansion that Trump has said he’s hoped for as a stretch.
Yum Brands is in the midst of a transition after spinning off its China business in November 2016. Yum China trades as a separate stock on the New York Stock Exchange. As part of the separation, Yum China is a licensee of Yum Brands in mainland China.