What will U.S. Tax Reforms mean for Foreign Investors?

When Donald Trump swept to power on a tidal wave of half-truths and propaganda last year, it was easy to overlook his core appeal among the electorate. A self-proclaimed man of the people, Trump pledged to wage war against the establishment and restore growth to the working class routes of America.

While the populist President may well have initiated some form of class war, however, it’s becoming increasingly apparent that he is doing so on behalf of the rich and to satisfy his own, personal agenda.

His proposed tax reforms seem to reaffirm this, and in this post we’ll expose these in further detail.

Why Trump’s Reforms will Benefit Foreign Investors

Despite being sold to voters as a ‘working and middle class tax cut’, Trump’s proposed tax plans have not stood up well to scrutiny. More specifically, a recent study has suggested that America’s hard-working core could well lose out in the wake of Trump’s tax reforms, with foreign investors said to be the most likely beneficiaries.

At the heart of this is corporate tax reforms, which will see the current rate of 35% reduced to just 21% for businesses. This will immediately boost the profitability of multinational corporations, sending their stock prices soaring as a result. Given that foreign investors currently own an estimated 35% of all corporate stock in the U.S., this demographic will benefit to the collective tune of $70 billion per annum under Trump’s plans.

Conversely, working and middle class households will only see temporary and nominal reductions to their tax burden, equating to a relatively paltry financial benefit of $23 billion each year.

This is a startling comparison, and one that does not sit well with Trump’s rhetoric. It also reaffirms that idea that Trump is focused on boosting big business and strengthening his own, global brand, rather than becoming a saviour for middle class America. This notion is supported by the fact that his tax reforms will also boost the nation’s commercial property market, which is also dominated by overseas investors and some of the wealthiest citizens in the U.S.

The Last Word – How the U.S. Will Become a Safe Haven for Foreign Investors

Despite the smoke and mirrors that surrounds Trump’s tax plans, there’s no doubt that America’s multinational corporations and foreign investors will be the big beneficiaries. In terms of the former, now is probably the ideal time for brands to partner with companies like RSM Global to audit their finances and capitalise on Trump’s tax reforms.

From the perspective of foreign investors, there’s every chance that Trump’s tax reforms will transform the U.S. into a safe haven. This is particularly true when you consider the declining appeal of London among investors, as Brexit continues to challenge and redefine the global economic landscape.