Corporate Tax

US corporate tax hikes would minimize S&P 500 earnings by 5% – Goldman

A trader looks at a screen that represents the S&P 500 on the floor of the New York Stock Exchange (NYSE) in New York, USA, 27 April 2017. REUTERS / Brendan McDermid / File photo

Sept. 13 (Reuters) – A rise in the U.S. domestic corporate tax rate to 25% and the passage of roughly half a proposed increase in tax rates on foreign income would reduce the S&P 500’s profits by 5% in 2022, analysts said by Goldman Sachs.

Reuters reported Sunday that the US House of Representatives Democrats would propose raising the corporate tax rate from 21% to 26.5% as part of a comprehensive plan that includes tax increases for the wealthy, businesses and investors. Continue reading

After incorporating tax reform into their models, Goldman analysts said they expect the S&P 500 to earn $ 212 per share in 2022, below the consensus estimate of $ 220.35 for Wall Street, which shown by refinitive IBES data.

The bank’s analysts said the market appears to be only partially pricing in an increased tax rate in 2022 or allowing for a capital gains tax hike, although they added that Goldman analysts were only expecting a scaled-down version of the proposals.

Reporting from Medha Singh in Bengaluru; Adaptation by Patrick Graham

Our Standards: The Thomson Reuters Trust Principles.

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