Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Goldman Sachs Warns Biden’s Tax Package Will Cut Earnings Growth

Stock Markets Apr 12, 2021 05:36AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Goldman Sachs Warns Biden’s Tax Package Will Cut Earnings Growth
 
US500
+0.02%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GS
-0.69%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
SPY
+0.15%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

(Bloomberg) -- Joe Biden’s tax hike proposals will deal a severe blow to corporate earnings growth next year, Goldman Sachs Group Inc (NYSE:GS). strategists warned, highlighting a headwind for U.S. equities following a rally that has pushed prices to record highs.

The U.S. president wants to raise corporate income tax to 28% and set a 21% minimum levy on global corporate earnings. The ambitious package is set to face resistance in Congress, before a potentially revised version goes into effect next year.

Goldman strategists including David Kostin estimate that in the unlikely scenario that no tax reforms are adopted, the S&P 500’s annual earnings per share will grow by 12% to $203 next year. However, full adoption of the Biden proposals would cut growth to just 5% or $190.

“Legislation will be heavily negotiated,” the strategists write, adding their current estimate for a 9% earnings per share growth assumes that taxes will rise.

The president plans to meet with a bipartisan group of centrist lawmakers on Monday as part of his pitch to support initiatives that he said would address inequality, strengthen the U.S. economy and rebuild the country’s infrastructure. Centrist Democrats like West Virginia’s senator Joe Manchin have said that the current tax proposal goes too far.

While global stocks have rallied on the expectation that economies will rebound as vaccinations against the coronavirus progress, cash-starved governments are under pressure to raise corporate taxes following an unprecedented spending spree to cushion the blow from the steepest recession in living memory.

The Biden administration has floated a proposal for a new international tax code that would hit as many as 100 global corporate giants with a levy on their revenue. A push by European Union members to tax more of the income on the countries where tech giants do business had been stalled, amid a pushback from Donald Trump’s administration.

 

 

Goldman Sachs Warns Biden’s Tax Package Will Cut Earnings Growth
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
Raymond Pasillas
Raymond Pasillas Apr 12, 2021 9:44AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
People will do whatever they can to steal your money.
Jabie Bulie
Jabie Bulie Apr 12, 2021 8:08AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Typical democrats who want to steal our money ! Just like they steal elections !!
Zeb Fullmer
Zeb Fullmer Apr 12, 2021 7:33AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Biden doesn't even know his administration put this tax hike proposal out. He is still lost in his bedroom looking for his dentures.
Larry Deangelis
Larry Deangelis Apr 12, 2021 6:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
If we learned anything over the last 12 years is that: Earnings don't matter in this ponzi scheme
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email