Making the Most of Corporate Tax Reform
Although nothing major has happened yet, rest assured that corporate tax reform is on the way. The Trump administration has made big promises and at some point they are coming. So far, the president has proposed reducing the corporate tax rate from 35 percent to 15 percent, while republican leaders in Congress have proposed a slightly more modest reduction to 20 percent.
Either way, the cut would represent a significant reduction form the current rate of 35 percent and corporations would see a huge boost. For example, if the effective tax rate dropped to 8.4 percent, then S&P companies would see the amount of pretax income they keep jump to about 85 percent from the current amount of about 76 percent.
The president has also proposed a repatriation rate of only 10 percent. In other words all the corporate income that companies are currently holding overseas in order to avoid the 35 percent U.S. corporate tax rate would only be charged a 10 percent rate if it were brought home to the U.S. There could also be a removal of the interest-deductibility, which could actually hurt earnings, but the tax breaks would far outweigh the losses.
Therefore, if you add it all up you get a lower corporate tax rate that would boost earnings by about 11 percent combined with a repatriation rate that would boost earnings another 2 percent. Removing the interest-deductibility would lower earnings by 2 percent, therefore leaving a net boost of 11 percent to S&P 500 earnings.
Financing A More Exclusive Lifestyle
It’s surprising that the emerging market is now the biggest consumer of luxury goods, as reported by Deloitte, where a more mature audience once held the title. This will require luxury brands to reinvent their marketing approach in order to accommodate their new clientele. With an increase in income and more access to loan products, the new luxury consumer is fully equipped to have all they desire. But what is it that this elite group of consumers really want?Fast Cars Are No Longer EnoughWhile
How Do Biotech and Pharma Companies Feel About New Tax Law?
How Do Biotech and Pharma Companies Feel About New Tax Law? The back and forth regarding the new tax reform bill has been endless since even before it became law. Obviously, there are pros and cons and both sides hold tight to their arguments. Additionally, some taxpayers and industries oppose the reform, while others are…
Five Easy Steps To Help You Retire Wealthy
What hard-working individual doesn’t dream about retiring rich and living the good life throughout his or her golden years? After all, what’s the point of working your life away if you never get to enjoy the fruits of all your labors? The problem is, for many, retiring wealthy and living the good life is just that: a dream. In fact, for many, retirement is a daily battle just to have enough to get by after paying for all their necessary food and medical care. That’s not how retirement should be,
Five Mistakes You Can’t Afford to Make at Work
Have you ever made a bad mistake at work that you just couldn’t live down? No one is perfect and everybody makes mistakes. In most cases, people can overcome mistakes they make at work, but there are a few missteps that could really end up costing you. So, even though you’re not perfect make sure you do everything in your power to avoid these five critical mistakes at work.Promising too much – we all want to accomplish as much as we can and impress our bosses and coworkers. However, it’s a bad