Markets increased expectations for lower corporate tax and higher profits after taxes.
Changes in tax laws always create new classes - of winners and losers.
Always chances of tax reform are less than 50/50 and this year it is also tthe same way.
S & P500 index rose by 11% from Trump's election in November. It is impossible to say what percentage of this is due to expectations for tax reform.
Trump still has not submitted its plan to Congress. Republicans revealed such a possible plan last summer and is now expected to legalize this year are rising.
And they do not plan to just "rearrange the furniture" but completely restructure the way businesses and consumers pay taxes.
The administration and the president rely on the new border tax as a base of the plan.
This tax would impose tariffs on certain products or class of products to punish market partners that do not deal fairly with the United States.
According to other economies such measure could do more harm than help.
Border fee will have effect on total exports and imports in the US.
In the current system, US corporations are taxed to not where it does sell its products and where their headquaters are.
So some companies have moved to other countries and this is the reason, large companies like Apple, Google and Microsoft keep billions of dollars in profits in other countries where taxes are lower.
This plan also aims, in order not to export companies money from the US.
Source Yahoo Finance
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.