Investment Implications of the New Tax Law
After more than a year of political posturing and investor anticipation, Congress finally approved a $1.5 trillion tax cut, the most sweeping U.S.fiscal overhaul since 1986. The 2017 Tax Cuts and Jobs Act was signed into law by President Trump last Friday, December 22, meeting his pledge to deliver tax reform before Christmas. The complex 1,000-page bill features changes that are intended to spur economic activity through a reduction in both individual and corporate tax rates, and simplify the tax code by eliminating or trimming a variety of deductions and exemptions. In this special commentary, we look at the likely impact of the final bill on the economy, monetary policy, and the financial markets in the coming years.