Corporate tax reform may be the most important potential policy change under President Donald Trump to revive the stock market rally, but individual tax reform would have a greater economic impact, according to Horizon Investments’ Q1 Review webinar.

“Individual tax reform has the potential to have the biggest impact because it targets the larger part of GDP and impacts the wealth effect,” said Scott Ladner, head of risk at Horizon Investments.

He explained that consumer spending accounts for 65% of U.S. GDP while business investment accounts for 17%; government spending, 15%; and net exports, just 3%.

Corporate tax and regulatory reform, however, “can have a big impact on how businesses operate,” said Ladner.

Currently, businesses are finding it difficult to make long-term investments because of uncertainty about regulations and tax reform, including a possible border adjustment tax, which favors exporters over importers, and that’s hurting some stock prices, said Ladner.

“Retail shares have been on a roller coaster ride because of the border adjustment tax,” said Ladner. “Retailers import a lot. It would essentially be a tax on them.”

Trade policy reform, which Trump had been touting the loudest, would also affect individual companies and sectors but have a much smaller impact on the broader economy because of its limited contribution to GDP.

Government spending on an infrastructure program — “low-hanging fruit” and a “no-brainer,” according to Lander’s colleague, Greg Valliere, chief global strategist at Horizon Investments — would have a bigger impact; it would help support industrials and materials stocks, said Ladner.

None of these Trump policies has been activated yet, but that hasn’t stopped the stock market from discounting their adoption.

Since the presidential election, the Dow Jones industrial average has gained almost 13%, topping 21,000 at one point, and the S&P 500 has advanced by 10% but some sectors have gained much more.

The S&P 500 financial sector, whose stocks could benefit from deregulation and more Fed rate hikes, has rallied almost 22%, and its tech sector is up almost 17%. (Repatriation of overseas assets at a 10% tax rate, which Trump has proposed, would boost Apple’s profits by 16%, according to Citigroup analysts.)

“Different policies make individual companies matter again,” said Ladner.

But the broader market has retreated from recent highs. “Securities ran up quick,” said Ladner. “Now it’s time for the policies to be put into place. We won’t see a lot of impact on Q1 earnings.”

Trump told The New York Times on Wednesday that he wants to fast-track a $1 trillion infrastructure plan and is considering packaging it with a tax reform or health care reform plan in order to appeal to Congressional Democrats and win bipartisan support.

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