US stocks are currently on a streak, perhaps partially due to the expectation that corporate taxes will be reduced dramatically in the next couple of years. However, some of the economic analysis that I've read suggests that US corporate taxes are already comparable to foreign firms' taxes when everything is taken into consideration, and also other economic analysis suggests that corporate tax reform won't do much, if anything, to boost productivity growth.
Let's assume that US corporate taxes do get cut in the next year or two, and accordingly US corporate profits are higher. As someone who is a buy-and-hold index investor who is far from retirement, is that something that you think I should be excited about from a return standpoint? Or, alternatively, is it likely that a renewed Democratic majority (already the majority in the last presidential election) will come in and return the corporate tax rates back to where they were? If so, since I'm not planning on selling any stocks soon (strongly in the accumulation phase), to what extent will this corporate tax windfall be likely gone by the time I sell? I rebalance with new contributions so I'm not even selling winners then usually.
Obviously lots of need for a crystal ball above, but I'm interested in your guesses. More concretely I might ask, historically, how "sticky" has the corporate tax policy been in the US? Does it change dramatically with administration changes, or does it instead tend to persist for long periods of time?
Submitted February 25, 2017 at 09:57AM by compost_binning http://ift.tt/2mowkx2
