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Bloomberg
Joe Biden’s tax hike proposals will deal a blow to corporate earnings growth next year, Goldman Sachs Group Inc. strategists warned, highlighting a headwind for US equities following a rally that has pushed prices to record highs.
The US 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 J Kostin write in a note 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.