In short, Trump managed to persuade the US Senate to pass a
Republican proposal for a $1.3 trillion tax cut that is likely to further boost
the American economy. Basically, he cut Corporation Tax on business profits
from 35% to 21%. It smacks of copying a Ronald Regan move in the 1980’s which
is all based on a lower tax intake for the US Government in the short term but
then getting a bigger total tax intake in the future from companies making more
profits. Time will tell.
I guess Trump will just be pleased he’s managed to pass anything
looking at all meaningful in his first year of office.
Anyway, enough of Trump……what’s the impact for the UK? Tax cuts
tend to be an economic incentive for businesses to invest……and for employees to
work and spend. An already strong US economy is strengthening and this is
likely to boost it further. When the largest economy in the world is strong,
those on the coattails receive an economic shot in the arm also.
With all the negative impacts that Brexit is having, a shot of
economic steroids from Trump can only help.
No surprise that economic stimulus comes from afar and not from
our own doing. Take note Mrs May.
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