Well before he entered 1600 Pennsylvania Avenue, Donald Trump promised that if he were elected president, he would deliver major economic growth and “the biggest tax cuts since Ronald Reagan” — a feat that Congress is weeks, possibly days, from delivering on, marking the first major legislative achievement for the now-president.
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In anticipation of tax reform and strong November jobs numbers, U.S. stocks have gained approximately $6 trillion in value since Election Day and $4 trillion since Inauguration Day, as measured by the Wilshire 5000.
“[The business world is] 180 degrees from where we were about a year ago under the other administration. I think what we’ve seen in regulation rollback, you know, the guideline, if you want to add one you’ve got to take two off, you look at the reduction in EPA, you look at some of the regulation controls, that’s been very positive,” former Home Depot (HD) and Chrysler CEO and current XLR-8 CEO Bob Nardelli told FOX Business’ Maria Bartiromo.
Nardelli also addressed the overhaul at General Electric (GE), where he previously served as a senior executive for 30 years. Last month, GE CEO John Flannery announced that the industrial giant will shed some assets and focus on three core businesses: health care, energy and aviation. GE will also cut its dividend and lay off 12,000 workers in its power division.
Despite his legacy with the company, Nardelli said he would not buy the stock right now, which closed at $17.71 per share and is down nearly 45% from the same time last year.
He says companies are excited about the potential tax implications for small business. Currently both the House and Senate tax bills have proposed a corporate tax rate of 20%, but there has been speculation that by the time a final bill is passed, the rate may increase to 22%.
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The U.S. currently has a corporate tax rate of 35%, the third-highest marginal rate in the world, according to the Tax Foundation. The average top corporate income tax rate, across 188 countries and tax jurisdictions, is 22.5%.
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“I think this is a real boom for business in the economy. We saw it in the GDP, we saw [the jobs report]. So this is a great environment that we’re enjoying right now, interest rates, everything,” Nardelli said.
Trump has touted that the GOP tax reform plans will bring strong economic growth with firms like Goldman Sachs (GS) and Barclays (BCS) looking for 4% global growth next year, following two quarters back-to-back of 3% economic growth or higher.
