The corporate tax rate in the U.S. has historically been higher than its international counterparts. U.S. companies pay on average 5% higher tax rate than European companies, excluding real estate. Real estate companies pay significantly lower taxes in the U.S., benefiting from deductions and taxes deferred to investors via dividends and capital gains.
As Congress debates tax reform legislation and lowering the corporate tax rate to 20%, there are also several current deductions that will no longer qualify. Financial firms look to benefit the most from this as they typically have fewer deductions than other sectors. Whether any corporate tax savings will make their way onto corporate balance sheets and retirement plans is yet to be seen.