Forget Trump’s Tax Cuts. Increases Are on the Horizon.
Investors have barely had time to enjoy the spoils before having to worry about the fallout.
Always be sure to read the fine print when investing.
Photographer: Mike Theiler/Pool via Bloomberg
It’s pretty clear President Donald Trump’s tax cuts haven’t worked out as well for investors as many had hoped. Before too long they will have to start to worry about how stocks do after his tax increases kick in. (That’s right, there was some fine print in the president’s much self-promoted tax cuts.)
The market, as measured by the S&P 500, has returned 7.4% since Trump’s tax cuts were passed in mid-December 2017, and about 40% of that return comes from dividends. That’s not terrible, but it’s not great given the cost. The change in the corporate rate alone, according to my calculations, is on track to cost as much as $2 trillion over 10 years.