There’s a myth being perpetuated that Trump’s tax proposals will be beneficial to US equity holders.
Actually, to call it a “myth” isn’t entirely fair. What you’re hearing about the benefits of lower taxes might be true for IG corporates, but have you considered the effect offsetting proposals that eliminate the tax deductibility of interest will have on highly leveraged firms?
If you haven’t, you probably should consider some “alternative facts.”
I’ll outline the details in a piece out later this evening, but for now, consider the following table from Citi’s Matt King and see if you can spot the problem (highlights are provided as hints).
Here’s another chart to help you along (again with highlights):