Big companies including General Electric Co. and State Street Corp. will reap the benefits of a tax overhaul that will sharply lower rates for corporations to 21 percent from 35 percent beginning in January.
“From everything we have all read, it should be a positive to State Street,” Jay Hooley, chief executive of the Boston financial services giant, said in an interview before the final passage of the bill. The House and Senate passed the bill Tuesday and have delivered it to President Trump, who is expected to sign it.
Hooley said the company will use the tax savings to potentially invest in new systems or products but will also reward its shareholders.
Hooley said he was concerned about the law’s ultimate effect on lower- and middle-class taxpayers and would like to see most of the benefits go to those brackets.
“Nobody knows how it’s all going to unfold, but if you want to stimulate an economy, you want to push the benefits as far into the system you can,” he said.
Michael Dell is breathing a little easier these days after facing a potentially onerous tax bill when lawmakers proposed to sharply limit interest expense deductions on preexisting debt. That rule would have disproportionately hurt Dell’s company, which borrowed $50 billion to buy Hopkinton data storage company EMC last year. A Dell executive had estimated that the company might have had to pay hundreds of millions of dollars more annually in taxes.
“The bill goes a long way toward modernizing our tax system,” Dell spokesman Dave Farmer said in a statement. “We are pleased that the interest provisions were changed to reduce the adverse impact to Dell and similarly situated companies.”
Dell, as well as General Electric, is not only happy about the lower corporate tax rates but also the effort to move the United States closer to a territorial system in which businesses would pay US taxes only on profits they earn here.
“GE supports the tax reform plan because it would upgrade the US to a territorial tax system for the first time in history, bring rates in line with other countries, and allow US businesses and workers to compete fairly around the world, so it’s the quality of our products that determine whether we win global deals, and not tax differences,” according to a statement from GE, the Boston-based conglomerate.Shirley Leung can be reached at email@example.com. Follow her on Twitter @leung.