Sept. 26, 2017
Steep tax cuts could trigger an increase in mergers and acquisitions, but the size of deals is contingent upon interest rate reductions, according to an article in Bloomberg BNA. In their article, authors Laura Davison and Colleen Murphy examine how a potential tax reform plan released by House Republicans could impact M&A activity, and how lawmakers’ plans to pay for the rate reductions is key. The article also outlines how a potential 10-year corporate rate cut could also be extended. David Hardy, a partner in Osler’s Taxation Practice Group, explains.
“There is a broad sense in recent years that the federal government isn’t able to withdraw benefits once extended,” David tells Bloomberg BNA.
The article also explains how industries including private equity would be impacted by how lawmakers decide to treat the deduction for interest expense.
For more information, read Laura Davison and Colleen Murphy’s article “Potential M&A boom from tax cuts hinges on interest deductions” in Bloomberg BNA.