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Why small caps could see big gain in the Trump tax plan

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The biggest taxpayers in American business today are the smallest companies, and they could see a Trump windfall that is now a big part of their appeal with investors.

"The effective tax rate for the Russell 2000 is 32 percent, and the we calculate at 26 percent. There's three reasons they rallied so hard — valuation, the domestic exposure and the corporate tax rate, " said Lori Calvasina, chief U.S. equity strategist at Credit Suisse.

Calvasina said the recent run in small caps has made them pricey. They are still attractive, she said, but getting close to the point where she would consider turning neutral on them. This week, the small-cap Russell 2000 has given back some gains — about 1.4 percent — after a 15-day winning streak boosted it by 16 percent. The Russell was up 11 percent for November.