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US $ 1.5 trillion tax cut has no major impact on companies' investment plans: Reuters survey

© Reuters. US President Trump Signs Signature of White House Tax Law in Washington

WASHINGTON (Reuters) – The Trump government's $ 1.5 trillion tax cut package did not seem material, according to the US government to influence a survey that was published one year after the largest revision of US tax legislation in more than 30 years.

Monday's quarterly National Business Economics (NABE) survey of industries found that while some companies reported accelerated investment, 84 percent of respondents said they had not changed their plans. Compared with 81

percent in the last survey published in October.

The White House had predicted that the massive stimulus package, marked by the reduction in corporate tax rates from 35 percent to 21 percent, would boost business spending and employment growth. The tax cuts came into force in January 2018.

"A large majority of respondents (84 percent) say that corporate tax reform a year after their adoption did not cause their companies to change their hiring or investment plans," said NABE President Kevin Swift.

The lower tax rates, however, had an impact on the goods-producing sector. Fifty percent of respondents in this sector reported increased investment in their companies, and 20 percent said they diverted overseas attitudes and investment to the US.

The NABE survey also pointed to a further slowdown in corporate spending, after weakening sharply in the third quarter of 2018. The survey's investment fell in January to its lowest level since July 2017. Expectations of investment for the next three months also weakened.

"Fewer companies increased their investment compared to the responses from the October survey, but the decline seemed to focus on structures rather than investment in information and communication technology," said Swift, who is also Chief Economist of the American Chemistry Council , 19659004] According to the survey, employment growth improved slightly in the fourth quarter of 2018 compared to the third quarter. Just over a third of respondents said employment in their companies had increased in the last three months (31 percent in the October survey). The predictive level of employment of the survey dropped to 25 in January from 29 in October.

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