It has been only a couple of weeks since President Donald Trump signed the Tax Cut and Jobs Act (TCJA) into law, but the legislation is already springing into action by offering the country a raise. Despite the plan containing many flaws, one part of the Republican tax bill – the corporate tax rate – is opening the wallets of Corporate America.
When the GOP slashed the corporate tax rate from 35% to 21%, the left continually framed the argument as robbing the poor and giving to the rich. The real argument should have been this: businesses are merely getting more of their money back, which is inevitably reinvested into their enterprises. And this appears to be already what’s happening.
If you watch MSNBC or read The New York Times, then you’d think that the only way to raise Americans’ standard of living is for the government to raise the minimum wage, institute new regulations, and take care of the population from cradle to grave. Instead of, you know, allowing the market to achieve prosperity for all.
Are greedy corporations taking the tax cuts and burying the profits in their backyards? Or are they extending goodwill to their workforces and putting the money back into their companies?
Walmart Gives the Works to Staff
Walmart is a global retail juggernaut, generating billions of dollars in annual revenues and employing one million U.S. workers. The company didn’t need to take any steps in the wake of the tax cuts, but it did, and (almost) everyone is celebrating.
Doug McMillon, CEO of Walmart, announced on Thursday that the company will hike the minimum wage to $11 per hour, and will hand out bonus checks of up to $1,000 to senior hourly employees.
The corporation is further revamping its family benefits structure. Moving forward, Walmart will be providing full-time hourly workers with 10 weeks of maternity leave at full pay, an increase from six to eight weeks at half pay. Moreover, new fathers and non-birthing mothers will be proffered full paid leave at six weeks, while full-time salaried and hourly workers will be extended financial assistance if they are looking to adopt children.
McMillon said in a statement:
“Today, we are building on investments we’ve been making in associates, in their wages and skills development. It’s our people who make the difference and we appreciate how they work hard to make every day easier for busy families.”
Good for Walmart. But Corporate America isn’t stopping there.
US Airlines Promise Employee Bonuses
Two of the biggest airlines in the U.S. are promising hefty bonuses for their employees.
Earlier this year, Reuters reported that American Airlines and Southwest Airlines confirmed in internal memos that they will give their personnel a $1,000 bonus in the first quarter of 2018. The bonuses total roughly $130 million, and the airlines will distribute the money to each member at their mainline and wholly-owned regional carriers.
The funds will emanate from savings in the Republican tax bill.
Alaska Airlines and JetBlue are other small carriers that will give a $1,000 bonus to thousands of employees.
Banking Sector Banks on Savings
The U.S. banking sector will experience the biggest savings of any industry. According to JPMorgan CEO Jamie Dimon, for instance, the tax cut was worth approximately $3.5 billion to the company’s assets. Wells Fargo, as another example, now anticipates fourth-quarter profits to be $3.4 billion.
What’s going to happen? Everyone is sharing the wealth – without wielding the government club.
Capital One said on Thursday that it will increase its minimum wage to $15 per hour for U.S. employees.
Speaking during a quarterly conference call, Wells Fargo stated that portions of the tax windfall will raise pay for low-level staff members to $15 as well as passing the savings onto its customers. The bank vowed to expand its business by doing more mortgage and credit card lending and will donate greater sums to community and non-profit organizations.
JPMorgan plans to increase wages and benefits for staff this year.
Western Alliance will boost bonuses, maternity leave benefits, and base pay of the lowest-paid 50% of employees by 7.5%. Even 401(k) matching contributions are rising.
Fifth Third Bancorp confirmed it is raising its minimum wage to $15 and will offer one-time bonuses of $1,000 to 75% of its workforce.
These announcements do not include all the workplace and training investments they expect to make.
Telecommunication and Others Dish Out Bonuses
The telecommunication conglomerates are giving significant bonuses to tens of thousands of employees this year. In addition, they are also investing in new workplaces, infrastructure, and technologies.
AT&T said it will deliver $1,000 bonuses to more than 200,000 U.S. employees. The telecom behemoth is planning to invest an extra $1 billion in the U.S. throughout 2018.
Comcast, which owns several left-wing properties, will dish out $1,000 bonuses to 100,000 workers. It also projects to allocate more than $50 billion to infrastructure investments over the next five years. Comcast cited the tax reform bill and the repeal of net neutrality as reasons for its decision.
Boeing, a troubled business regularly grieving about unfair competition, says the TCJA would enable the company to spend $300 million on facility upgrades, job-training, and charities.
According to Americans for Tax Reform ATR), an estimated two million Americans are receiving a tax reform benefit, and many are obtaining something more permanent like higher wages or increased 401(k) matches. Again, it is a win-win for corporations and workers.
That said, where is the Armageddon from the corporate tax cuts? Like everything else the left huffs and puffs about, it did not come to fruition. How many times has the left cried wolf since Inauguration Day 2017?
Unfortunately, not everyone is pleased by the recent developments. Representative Nancy Pelosi (D-CA) dismissed the wage hikes and bonuses as “insignificant,” “pathetic,” and “crumbs.” The talking heads on CNN are still warning of the doom and gloom from the tax overhaul. Leftist outlets are declaring President Trump is ramping up his “war on the poor.”
For years, the left has been enamored over Scandinavia like a bunch of love-sick teenagers. Senator Bernie Sanders (I-VT) has garnered immense cheers from the youthful crowd for wanting to transform the U.S. into Denmark or Sweden. Not surprisingly, when Trump emulates one of their policies and makes the corporate tax rate in line with the rest of the Organisation for Economic Co-operation and Development (OECD) nations, they whine, pout, and complain – like socialist teenagers normally do.
But this is simple business: when you give the private sector more of its money back, companies reinvest the cash by expanding operations, raising worker compensation, and donating to communities.
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