The Trump administration's 9 page tax reform document was 8 pages longer than the last. That means, in Trump terms, it's 900% better than the last one. He has settled on calling it the 'largest tax cut in US history'.
In all seriousness though, the market has reacted positively to proposals put forward by the Trump administration that will see personal tax rates reduced and simplified, corporate tax rates cut to 20% from 35%, the elimination of estate tax and an increase in the standard deduction (similar to our personal allowance) increased from $6,350 to $12,000, to name a few of the proposals.
He also alluded to the one-off tax reduction on the repatriation of overseas US corporate earnings, which is a potential boon for both the tax coffers and for the US economy, as it would likely see an increase in capital expenditure in the US corporate space.
This still wasn't a full tax plan though and was very light on detail.
With the failure to 'repeal and replace' the Affordable Care Act (Obamacare), the Trump administration will be more keen than ever to get through some of Trump's plans, however there is still a tough job to do. The Republicans are split between 'fiscal hawks' who want to see any new tax cuts paid for by closing tax breaks elsewhere and then 'supply-siders' who feel the economic benefits in the future will outweigh the initial drop in tax take.
Of course this is more a framework than a policy document, as everything will have to be hammered out in congress, but one thing we can be sure of is that the Republicans want tax cuts and the Trump team needs a win.
The result is a stronger dollar and a positive equity market on hopes that lower taxes will accelerate US economic growth. Gold was also weaker.
Ever since Trump came in to power and the Republicans secured both the Senate and the House of Representatives, we have seen tax cuts and cash repatriation as two themes to really boost the US corporate space. After the failure of Trump's healthcare policies we'll be waiting eagerly to see how he fairs on the next task in hand.
The S&P 500 index closed the day 0.41% higher, approaching a record high by peaking at 2,511.75 yesterday, while bank and tech shares surged on hopes that lower tax rates will accelerate US economic growth.