Leaks have been driving markets all day, here is the proposal
- 1-year delay in 20% permanent corporate tax cut
- Meets $1.5 trillion cost (will cost $1.44 trillion)
- Keeps 7 tax brackets, sets 38.5% as highest bracket down from 39.6%
- Sets 10% tax rate for US companies with IP in foreign low-tax jurisdictions
- Ends deduction for state and local taxes, keeps business deduction
- Doubles exemption for estate tax
- Full expensing on business capital investments for five years
- Sets deemed repatriation tax rate at 12% for liquid assets, 5% for illiquid assets
- Leaves home mortgage interest deduction unchanged
- Expands US child tax credit to $1650
- Leaves carried interest loophole unchanged
Most of this has been leaking out all day.
Naturally, the carried interest loophole remains.
The big question is whether this will pass. Indications from the House is that this is acceptable, even if they would prefer the corporate tax cut was immediate.
In terms of stocks, look for companies to bury profits in 2018 or tax losses and then have massive profits in 2019.
