Tom’s Braithwaite’s column (“If profits recover, governments are ready to tax them”, Opinion, May 30) is excellent on whether the market has priced in potential future tax increases to pay for the circa $17tn stimuli. I would make one comment about his reference to Moderna, Netflix and Zoom Video where he says: “Higher taxes will not hit these fast-growing companies, most of which make little in the way of profits to start with.”

The future may hold an increase in jurisdictions which impose revenue-based taxes such as France’s company value-added contribution (CVAE) and Texas’ margin tax. Hence, loss making companies will see an increase in tax expense, which will need to be factored into their forecasts as to when they will have positive earnings per share (EPS).

Aaron Schaal
Rye Brook, NY, US

Get alerts on Letter when a new story is published

Copyright The Financial Times Limited 2021. All rights reserved.
Reuse this content (opens in new window)