Donald Trump’s proposed corporate tax cut – called the biggest of its kind in history – has just been confirmed by the U.S. Treasury secretary Mnuchin as reduced to 15%.
The cut has been billed as a tax reform but whether or not it represents the beginning of a major U.S. taxation reform is yet to be revealed, the Guardian reported.
U.S. markets have responded by opening at a slightly higher rate than expected with The Dow Jones Industrial Average up nearly 7 points while the S&P 500 is virtually flat and Nasdaq Composite is 1.45 points better, according to the Guardian.
Lower corporate tax in the U.S. could make the region amongst the most attractive onshore locations for reinsurers and insurers, increasing competition for other insurance and reinsurance markets and countries with a higher tax rate such as the UK, also making low tax offshore markets slightly less attractive to U.S. companies.
Mnuchin declined to unveil specifics about the tax reform, but said it would be “the biggest tax cut and the largest tax reform in the history of our country.”
Mnuchin and White House chief economic advisor Gary Cohn are expected to reveal further details later today.
This corporate tax reduction is in line with recent reports by Credit Suisse equity analysts, who said there’d be some form of corporate or personal tax reform, but added they believed the Border Adjustment Tax has effectively no chance of getting through the Senate’s doors.