Market history · Policy ·
US tax reform cuts the corporate rate to 21%
The Tax Cuts and Jobs Act, signed on 22 December 2017, cut the US federal corporate tax rate from 35% to 21%, lowered rates for many individuals, and changed the taxation of overseas profits.
Companies' after-tax earnings rose sharply in 2018, and record share buybacks followed. The act also added materially to the federal deficit.
The takeaway
Tax changes move company earnings directly, and the effect can be a one-off in the comparison.
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