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Cadinha Blog


Corporate Tax Reform?

I have been carrying high hopes for tax legislation which would lower the corporate tax rate to 28% or even 25% from the current 35%.  Such a happening would relegate all current and negative discussion about equity valuation to the dustbin.  In order to make such legislation possible, there must be some feature in the bill that President Obama needs or wants for his agenda.  Repatriation clearly offered a chance for tax revenues to pay for Obama’s programs, but the recent Senate decision to separate Repatriation discussion from any Corporate tax reform reduces the possibility of tax legislation.  Additionally, the President’s “in your face” tactics since the lost election has prompted similar tactics from the Republicans in response, making it difficult to imagine a compromise between the two ideologically opposed sides.

I find it unlikely that both parties will be able to put emotional personal feelings aside in order to reach a compromise leading to a more competitive U.S. corporate tax rate.  Accordingly, I am rapidly becoming a “tongue in cheek” bull, having lost much confidence in the possibility of tax reform this year.

About the Author

Harlan J. Cadinha
Founder, Chairman and Chief Strategist




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