If you are a global company that has made leveraged investments in US renewable energy production in recent years, those assets now look like a bird that has run into a wind turbine.
Someone had to lose from the massive tax reform law that will almost certainly pass Congress, and it turns out that you will be hit suddenly by several of its rotating blades.
Much bandwidth has been taken up describing prospective trillions in deficit increases and the happiness of the already-rich beneficiaries of the express-tracked tax bills. Less consideration has been given to the gobsmacked losers, most of whom conformed to US public policy in recent years, even decades. For as long as most investors can remember, leveraged investments have been treated well in the US. Interest charges have been deductible, renewable energy favoured and neither Democrats nor Republicans and Congresses have imposed retroactive changes in tax law. Those days are over.
The notionally tight budgetary arithmetic has required that winners, such as, for example, the heirs of commercial real estate fortunes, must be offset by increased taxation of others. In deciding who will pay for the Trump children’s future, Congressional leadership decided global leveraged investors had to get BEAT.