Don’t believe the spin, corporate taxes are rising

Don’t be surprised reading the headline of this Bloomberg article.

Of course, corporate taxes were going to rise.

The British government made sure of it when they increased the corporate tax rate from 19% to 25% in April 2023.

In this article from February 2023, I wrote that “Corporate taxes were as good as they were going to get”.

FTSE-100 is full

In addition, I cited that the FTSE 100 is “full”.

it was trading at 7,915 at the time of writing that note compared to today’s price of 7,513

Furthermore, in other notes, I alluded to a pragmatic case when the “I” in company’s EBIT rises and when the expected increases in the “T” occurs, we will see earnings (net profits) come under pressure.

It also contains a link to very good paper concluding that much of the attributed earnings for S&P 500 companies over the previous 18 years, came with the assistance of low (subsidised) interest rates and corporate taxes.

A case for a 30% decline in the S&P 500

The numbers won’t lie

And people wonder why investors and corporations are always looking for low taxation domiciles.

December 5, 2023

by Rob Zdravevski

rob@karriasset.com.au