Home Public AffairsPolicy Corporate Tax Rates

Corporate Tax Rates

wheel reading tax reform

The reduction in corporate tax rates will provide an earnings boost to corporations with net deferred tax liabilities (AT&T) and penalize corporations with net deferred tax assets (Citigroup).

When rates change, accounting rules mandate a company’s deferred tax assets and liabilities be adjusted to reflect the new rates at which those assets and liabilities will be “realized” or “settled.” The reduction of a liability increases earnings and boosts shareholders’ equity. The truncation of an asset, however, engenders a charge to earnings and diminution of shareholders’ equity. While most benefit, financial companies, which often have copious deferred tax assets, suffer.

Robert Willens, President, Robert Willens LLC

You may also like

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

The Washington DC 100