President Trump’s Tax Reform Delays Could Already Be Hurting the Economy

They might not be able to stomach his platform as a whole, but major companies have been salivating at the thought of President Donald Trump’s proposed tax reforms.

In fact, companies couldn’t stop talking about the issue in the first quarter of 2017, with 81 companies in the S&P 500 mentioning tax reforms during earnings calls, according to FactSet. It’s not hard to gather why companies are so hung up on the topic: The promise of tax cuts helped send stock markets to stubborn new heights following Trump’s November elections, as both investors and chief officers bet on lower taxes unleashing corporate profits.

Bu the wait for a concrete proposal could cut into corporate profits and negatively impact the economy, said Tim Wach, Global Managing Director at tax advisory firm Taxand Wednesday.

That’s because some companies such as Emerson Electric (emr) are making some investments, but holding back on making major capital decisions including repatriating cash.

When asked by Andrew Ross Sorkin on CNBC Wednesday if Emerson’s investments would still be a good deal if Trump failed to pass tax cuts, CEO David Farr noted that his investments would still be “workable.”

“But I’ll get less return, and it’ll take longer to get the pay back,” Farr said.

Farr is not alone. According to a recent study from Taxand, about 55% of chief financial officers said they have delayed financial decisions because they don’t know what to expect from Trump’s proposed tax cuts. The report surveyed 136 respondents largely from major multinational corporations in the U.S., Europe, and Asia.

So the majority of companies are hitting the pause button on investment decisions, expansions, mergers and acquisitions, divestments, and even research and development, Wach said — potentially locking up capital that could be circulating within the economy.

That’s because drafts of the promised tax cuts so far have been “dramatically lacking in detail. With all of that, no one knows what to do. That has huge negative impact on investment decisions, tax decisions, and on the economy,” Wach said.

Meanwhile, that lack big corporate spending, which could’ve also been used to create jobs, is hardly going to be a helping hand for Trump to reach his lofty 3% GDP growth goal — a figure upon which his entire budget plan rests.