In the race for the White House, the largest companies in the US are facing two starkly different financial futures, separated by one vast sum: a quarter trillion dollars a year.
The potential price tag is thanks to the differing tax policies of the two candidates, one of the most crucial distinctions between them for corporate America. Kamala Harris is promising to partly reverse Donald Trump’s big reduction in the corporate rate, while the former president says he will lower it further, intensifying a debate over the legacy of his 2017 reforms and setting the stage for a year of wrangling with the new Congress that will also be elected on November 5. Big business, meanwhile, is gearing up to protect its gains.
The quarter-trillion figure is based on estimates from Goldman Sachs, which says Trump’s proposal to cut the corporate rate from 21 per cent to 15 per cent would add 4 per cent to the earnings of the S&P 500. Harris’s plan to raise it to 28 per cent would reduce earnings by 5 per cent, the Wall Street bank estimated, and her other corporate tax proposals would shave a further 3 per cent.