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U.S. Tax Cuts May Lead Companies to Take Too Much Risk, IMF Says

  • Trump tax plan could have unintended consequences, IMF warns
  • American firms already have high levels of debt, fund says

Tax cuts and financial deregulation proposed by the Trump administration could embolden American companies to boost risk taking to undesirable levels, the International Monetary Fund warned.

President Donald Trump has proposed cutting the corporate income-tax rate to 15 percent and taxing offshore earnings at a reduced level when companies repatriate the money. He has also suggested allowing firms to immediately expense capital spending, though they would have to give up their ability to deduct net interest expenses.