It hasn't even been signed yet.
That hasn't stopped the S&P futures from testing 2,700 (/ES) and Dow (/YM) from testing 2,4850 this morning as the new GOP tax bill seems to be "in the bag" and the House Speaker, Paul Ryan, is now promising us an "average" $2,059 tax break for a "typical" family of four making $73,000/year. If you take them at their word (and when has Congress ever lied to you?), then 100M housholds will save $200Bn a year yet, somehow, Corporations save another $200Bn AND the new tax cuts BOOST Federal Revenues because those companies will turn right around and put that money into building new factories and hiring millions of workers, which will boost total reciepts. What can possibly go wrong?
Nothing, according to the Index Futures, which are blasting higher about 0.5% this morning and that's lagging Europe, which is up over 1% – which seems kind of odd as the whole purpose of these tax cuts is supposedly to make us more competitive with Europs so wouldn't our gain be a detriment to them? Well, best not to think about logical things like that when we're trying to enjoy the rally, right?
Certainly, we don't want to read the actual bill, because it is one scary document! "The more you read, the more you go, 'Holy crap, what’s this?’” Greg Jenner, a former top tax official in George W. Bush’s Treasury Department, told Politico last week. “We will be dealing with unintended consequences for months to come because the bill is moving too fast.”
On Friday, a group of 13 tax law professors and lawyers, many of whom have been vocal opponents of the Republican plan, published a 34-page paper offering a taste of what those unintended consequences might be. You know how people have been joking about incorporating themselves ever since these tax bills started kicking around? That’s almost certainly going to be a thing. Investors may be able to shelter their investment profits by stuffing them into C-Corporations, which are in line for a low, 20 percent tax rate.