How a Trump Win in 2024 Could Affect Corporate Earnings
Written by
Jordan Rosenfeld
Edited by
Amber Barkley
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When it comes to corporate earnings, former President Donald Trump has already established himself as a friend to corporations, which is no big surprise seeing that he is, himself, a corporate founder and shareholder. More specifically, during his presidency, Trump passed the 2017 Tax Cuts and Jobs Acts (TCJA), which sharply cut the corporate tax rate from 35% to 21%.
If Trump were to win the presidential election for a second time, how would his policies affect corporate earnings going forward?
Precedent Shows Trump Is Pro Tax Cuts
It makes sense to look at Trump’s past policies regarding corporations to understand possible future policy moves. With the corporate tax rate already at a nearly historic low, according to the Institute on Taxation and Corporate Policy, there’s not much further for Trump to cut.
However, on the campaign trail, Trump has stated that he will reduce the corporate tax rate from its current 21% to 20% — a negligible amount, but a move that may signal that he is still very much pro-corporation in his policy setting.
How Corporations Benefited
Corporate boards and executives have a lot to gain from a second Trump presidency — or a lot to lose from a Harris presidency — from a tax perspective. Trump’s 2017 tax cuts already amounted to corporations paying a collective $240 billion less in taxes from 2018 to 2021 than before the TCJA was passed. For example, Verizon saved $11 billion in taxes, Walmart saved $9 billion and Facebook parent company Meta saved $8 billion.
However, since corporations are not a monolith, some industries saw more significant revenue gains as a result of this cut, including some of the following:
- Electronics and electrical equipment
- Information technology
- Network and other communications equipment
- Healthcare
- Industrial machinery
- Retail and wholesale trade
- Semiconductors and other electronic components
While Trump may not be able to reduce taxes further, a presidential win could allow him to keep rates from going back up.
A Universal Tariff
While not related to a corporate tax, per se, Trump also aims to support American corporations indirectly by imposing a 10% minimum baseline tariff on all imports from other countries, with a 60% tariff on those from China.
The Trump campaign’s “Agenda 47” plan states that increased tariffs will bring down taxes on “American workers, families and businesses.”
Analyses of the benefits of this move are mixed — the Tax Foundation states that it will likely initially raise revenue, but ultimately reduce gross domestic product (GDP) and potentially reduce jobs.
However, Michael Stumo, CEO of the Coalition for a Prosperous America, a bipartisan organization that represents domestic producers, told Fox Business that heavy tariffs on China are a necessary part of building back industry within the U.S. and pulling away from a dependence on Chinese made goods.
Pro-Deregulation
Trump has also been vocal about deregulation and was successful at rolling back some Obama-era regulations during his presidency.
Perhaps the most controversial of Trump’s attempts to make the climate friendlier to business and corporations is his desire to reduce the regulation of Wall Street regulators by scaling back on efforts that Congress passed after the 2008 global banking crash. It’s unclear what this proposal seeks to do, except perhaps to foster innovation or ease the ways in which businesses can make money, but some experts suggest it could have devastating economic implications.
Even if Trump is elected again in 2024, it’s hard to say how many of his campaign promises to corporations and others will become reality.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. For more coverage on this topic, please check out How a Harris Win in 2024 Could Affect Corporate Earnings.
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