Senior Editor, Digital Content, U.S. Chamber of Commerce
December 21, 2017
UPDATE (1/2/2018): GOP Majority Whip Steven Scalise's office is keeping a list of companies making investment announcements.
Before President Donald Trump puts his signature on the first major tax reform in 31 years, we’re seeing an immediate, positive effect.
As U.S. Chamber Chief Economist J.D. Foster explained, one of the key parts of the Tax Cuts and Jobs Act is lowering the corporate tax rate to 21%, “thus finally bringing the U.S. rate into better alignment with its major competitors, while the effective passthrough rate is similarly reduced.” The bill also allows full expensing on business investment for the next five years.
Because of these and other pro-growth policies in the bill, four American companies delivered some Christmas gifts by announcing they will invest in their workers and communities.
Last month, AT&T pledged it would invest an addition $1 billion into broadband infrastructure if the tax reform bill was passed. Yesterday, they added that it will “pay a special $1,000 bonus to more than 200,000 AT&T U.S. employees,” according to a company statement.
“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” said Randall Stephenson, AT&T chairman and CEO. “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”
The media and technology company will be handing out $1,000 bonuses to more than 100,000 employees. Along with that, Brian Roberts, Chairman and CEO of Comcast NBCUniversal, noted his company planned to spend over $50 billion over the next five years on infrastructure.
The aerospace giant will spend $300 million: $100 million will be donated to charities, focusing on education, local communities, and for veterans and military personnel; $100 million will go to training its workers; and $100 million will be spent on new “facilities and infrastructure enhancements for Boeing employees.”
"Each of these investments benefits Boeing's most important strength – our employees – and reflects the real-time impact and economic benefit of the reforms,” said Boeing President and Chief Executive Officer Dennis Muilenburg.
Fifth Third Bank
The Cincinnati-based financial services company will raise wages and issue a bonus. In a statement, the company said once President Trump signs tax reform, 3,000 hourly employees will get raises to $15 per hour and 13,500 employees will get a $1,000 bonus.
“We want to invest in our most important asset – our people,” said Fifth Third President and CEO Greg Carmichael. “Our employees drive our reputation, our business and our success.”
Idaho-based health care and home products company Melaleuca will give bonuses to its employeesbased on how long they've been with the company. "Melaleuca employees stay at the company eight years — which would result in an $800 bonus. The company also has 147 employees who have worked for [Melaleuca CEO Frank] VanderSloot for 20 years or more," the Associated Press reports.
“We’re going to be able to have quite a few substantial dollars after taxes,” VanderSloot said. “I suspect we’re one of the largest taxpayers in the state, so we’re going to have some more dollars to spread around. That money should go to the people who built the company.”
The North Carolina-based financial services company will, pay out a $1,200 bonus for about 27,000 employees, raise its lowest wage to $15 per hour, and donate $100 million to charities.
"By far and away, our associates are our most important asset. They're the biggest reason we're able to serve our clients each and every day in an extraordinary way," said BB&T Chairman and CEO Kelly King.
Bank of America
Bank of America will issue a $1,000 bonus to 145,000 employees.
“In the spirit of shared success, we intend to pass some of those benefits along immediately,” chairman and CEO Brian Moynihan wrote, in a memo to employees.
Critics of the tax reform bill scoffed that companies would reinvest in their companies, employees, and communities. But right way, we see those critics should be more careful in their punditry.
Tax reform is what the country needs for stronger, sustainable economic growth. We’ve only just begun to see the positive effects from it.
Editor's note (12/22/2017): Announcements from Melaleuca, BB&T, and Bank of America were added.
About the authors
Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.