The new Tax Cuts and Jobs Act should be a shot in the arm for private equity funds and could boost the valuation of deals as companies use their rising cash flow to expand operations.
The reduction in the overall corporate tax rate to 21 percent from 35 percent will benefit companies organized as C corporations. Firms that are organized as pass-through entities — LLCs, partnerships and S Corporations — will also see marginal income taxes decline from about 40 percent to as low as 30 percent.
