Einhorn Says Tax Reform Will Be Positive for Greenlight’s Returns
David Einhorn on tax reform
David Einhorn recently said in an interview with CNBC’s Closing Bell that tax reform would be helpful for Greenlight Capital’s returns.
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He said, “I actually think tax reform has a much better chance of passing than the health care package did. Companies we own in our portfolio tend to be profitable, so they tend to pay taxes. So lower corporate tax rates should really benefit them. We’re kind of hoping tax reform will pass, and we expect that will be positive.” The proposal to reduce corporate tax from 35% to 20%, reduce the individual tax rate, and introduce a territorial tax system could be beneficial for the economy (IWM) (SPY) (QQQ).
Businesses could use tax savings for capacity extension, buying new projects, and providing more dividends to the shareholder. All these processes could increase shareholder value. Capacity extension and investment in new projects could also boost employment. Due to these reasons, many fund managers and market participants are positive about tax reform.
In the next part of this series, we’ll analyze David Einhorn’s view on Tesla.