Steve Schwarzman, the chairman and CEO of Blackstone, said President Donald Trump’s tax-reform quest is a "game changer."
The billionaire and former adviser to Trump told CNBC that the tax bill was "actually sort of a game changer because there has been enormous frustration in terms of getting legislation passed."
The bill proposes to eliminate the deductibility of interest, something Schwarzman said would be a slight negative for private equity firms, which buy companies using financing, CNBC.com explained. It also proposes that ordinary income tax be applied to investments of fewer than three years, a longer timeline than the one year threshold currently applied, something that is also not a positive for his firm, he said.
"This is a whopper. There is no doubt about it in terms of its impact, scale and the fact that many people thought that this wouldn't work. It seems at this point a pretty good shot that this is going to get resolved before Christmas."
Meanwhile, investors assessed changes to the Senate’s version of a tax overhaul that could reduce gains for companies, Reuters reported.
The Republicans made last-minute changes to their tax bill, which included retaining the corporate alternative minimum tax (AMT) after initially proposing its repeal.
That put Senate Republicans on a collision course with Republicans in the House of Representatives, whose own tax bill repealed the corporate AMT and who are already calling for the tax to be eliminated in the final legislation.
“The (recent) retreat in tech stocks has been attributed to AMT inclusion. It’s the speculation on the details of tax bill that’s being played out in the market,” said Massud Ghaussy, director at Nasdaq Advisory Services.
“Expect the next two or three days for the market to behave irrationally. A lot of changes are being made to the tax bill and it obviously impacts various sectors in different ways.”
(Newsmax wire services contributed to this report).
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