US stock markets at record high as traders back Trump’s tax shake-up

THE American stock market hit record highs last night as traders backed Donald Trump’s major tax shake-up.

Wall Street’s S&P 500, Nasdaq and Dow Jones all soared amid rising optimism that the president’s Republican Party will be able to push through reforms in a bid to boost the economy.

The rally was mirrored on markets around the world, including London, Frankfurt, Paris, Tokyo and Hong Kong.

Championed by President Trump, the US plan will slash corporation tax and encourage big international firms, such as Apple and Google’s owner Alphabet, to bring back profits stashed overseas by charging an ultra-low one-off rate.

Many businesses have built up large reserves offshore because they do not want to pay heavy taxes on money brought back into the country. Analysis by Bank of America estimated that 4 of the largest US firms have £750billion stashed overseas – money that could be put to work in the nation’s economy.

There will also be cuts to inheritance tax and to income tax paid by the richest Americans.

It is thought increasingly likely that the proposals will be passed, leading to some of the biggest taxation changes since Ronald Reagan was president in the 1980s. But opponents claim the changes will help only the wealthy and cause suffering for poorer families.

A report last month by the Congressional Budget Office said the plan ‘gives substantial tax cuts and benefits to Americans earning more than $100,000 [about £75,000] a year’, and would drive up the nation’s deficit by £1.1trillion.

Despite these concerns, big business has largely welcomed the cutbacks.

The technology-focused Nasdaq Composite briefly rose above 7,000 points for the first time in history. The Dow, meanwhile, climbed 140.46 points to

4,79 . 0 – meaning it is up more than 5,000 points this year, another record.

Wall Street experts expect more growth to come. Robert Pavlik of New York firm Slatestone Wealth said: ‘The market is going to continue its rally based on the belief that we’re going to see Congress pass tax reform.’