Moody's: Trump administration tax proposals would widen deficit, but benefit companies

The Trump administration's blueprint for the reform of America's tax system raises the possibility of wider federal deficits and higher debt levels, explained Moody's Investors Service in a new report.

Key quotes:

• The blueprint, presented by administration officials on 26 April, was relatively light on details, but essentially provides a starting point for negotiations with Congress
• While the proposed tax cuts might boost economic growth in the short term, the effect would be unlikely to last long and wouldn't be sufficient to offset the reduction in government revenue
• Any unfunded tax cuts or expenditure increases would bring forward the weakening in US fiscal strength
• For US non-financial corporations, the proposed cut in the corporate tax rate to 15% from 35% is positive because it would lower cash taxes
• A lower corporate tax rate would be positive for banks because it would boost their profitability