2017.12.1722:37:00UTC+00US Firms Expect Sharp Growth in Earnings Due to Trump Tax Reform

US companies anticipate sharp growth in earnings in 2018 as Republicans in Congress are on track to overhaul the US tax system, with a bill likely to be passed into law this week.

Analysts and executives expect corporate earnings to be boosted by an average of almost ten percent, with some firms set to see significantly higher benefits of up to 30 percent, due to the proposed reduction in the main rate of US federal corporate tax from 35 percent to 21 percent.

Companies with relatively high tax rates and mainly US-based revenues, which are not hit by the new charge on overseas assets, will gain the most from the new code. Oil refiners, railroads, airlines and banks are seen to be among the biggest beneficiaries.

The 503-page bill was published on Friday, following talks between Republicans in the Senate and the House of Representatives, and over the weekend companies and their advisers have been working to understand its implications.

Details of the legislation could have a significant impact on the effective tax rates that companies face.

Analysts and executives have been making estimates of the bill's impact on earnings, helping drive the S&P 500 18 percent higher in 2017.

If passed, the bill would be the largest U.S. tax rewrite since 1986 and provide Republican lawmakers and Trump with their first major legislative victory since they took control of the White House in January in addition to Congress.