Wednesday, June 21, 2017
Wall Street got something big from Paul Ryan's tax cut speech
House Speaker Paul Ryan didn't confirm a whole lot about the coming Republican effort to slash taxes during what his team billed as a "major" speech Tuesday.
But the speech itself could be enough to placate investors that have been thirsting for any signs of progress on the tax reform front.
He kept to the rough outlines of his "Better Way" tax plan: cut corporate and personal taxes, simplify the tax code, and prioritize American-made products.
Ryan did not even confirm if he is still pushing for the border adjustment tax, a key part of his plan, only saying it was an "option."
But "the main story for the markets isn't the specific details," Greg Valliere, chief global strategist at Horizon Investments, told Business Insider. "Markets just want to know the process is still alive — and it is."
Wall Street targeted the tax cuts for corporations as their No. 1 policy priority following Trump's election, saying they would bring down the burden on companies and help raise profits.
But Republicans haven't made much progress on the cuts so far due to a variety of other issues — healthcare reform and the Russia investigations, for instance — eating up much of the congressional calendar. Now, with the Senate nearing a healthcare bill of their own, the sign of forward progress may be enough to whet investors' appetites.
"The key for investors is simple: the process is still plodding along, and the markets just want to see that tax reform and tax cuts aren't dead. And they're not," Valliere said in a note to clients Tuesday.
Still, there is no guarantee that the tax reform will get done this year, as Ryan promised, and many analysts remain skeptical.
"There is reason to be concerned that barriers to its passage may be too difficult to overcome, so it will be important to hear more on how Washington can address the policy and political obstacles standing in the way," Jon Traub, managing principle at Deloitte Tax and former staff director for the House Ways and Means Committee, said after the speech