The big development that fueled the Wall Street rally was the passing of House Republicans’ tax plan in a 227-205 vote. This will cut the corporate tax rate, reduce burden for most individuals and add ‘an estimated $1.4 trillion to the federal deficit over the next decade’. The Senate is discussing its own version of the plan, wherein the Republicans hold thin majority. So, it is still unclear if the chamber will have sufficient votes to pass it.
The Senate plan also deviates from the House bill on some grounds. The Senate now wants to defer the corporate tax-rate cut by a year. It also intends to repeal a main provision of the Obamacare law — “saving the government $318 billion over 10 years to help pay for the tax cuts, but leaving 13 million Americans uninsured by 2027, according to official estimates.”
There are several hurdles in the way to tax cuts. Still, things are looking bright at this stage when it comes to tax reform and put these ETFs up for gains.