Companies Announce Benefits of Tax Reform for American Workers
In the weeks following the passage of the Tax Cuts and Jobs Act (TCJA), American companies have unleashed a remarkable stream of wage increases, bonuses, retirement account contributions, as well as signaling increased plans for investment in workers and equipment.
As of February 12, more than 350 companies have made these intentions public, announcing over $150 billion in intended investments at home, and $4.2 billion in bonuses paid to more than 4 million U.S. workers.
The largest U.S. company (by market capitalization), the largest U.S. bank (by assets), and the largest U.S. employer have all announced intentions to raise worker wages or bonuses in the last several weeks. Without information on companies’ pay structures, placing an exact dollar value on the announced wage increases is difficult, but the Council of Economic Advisers estimates that the total increase in annual wages and salaries resulting from tax reform will reach $4,000 per household.
Looking back over the past 8 years, the Council of Economic Advisers also found that a lack of capital spending has contributed to the slow growth of worker pay. This lack of capital deepening was a result of our uncompetitive tax laws. The U.S. had the highest corporate tax rate in the developed world, which caused firms to locate factories and intellectual property overseas. Without additional spending on machines, factories, and technology, workers could not reach their highest level of productivity. They paid the price in stagnant paychecks.
However, the Tax Cuts and Jobs Act makes our tax rates more in line with the rest of the developed world, representing pro-growth reforms and putting American businesses on a level playing field with foreign competitors. When implemented, the capital investment announced by these companies, which represents more than 7 percent of all private non-residential investment in 2017, and by other companies incentivized to invest in American again, will help boost U.S. workers’ productivity and raise their take-home pay.
In addition to increases in take-home pay coming from bonuses and wage and salary increases, nearly 30 million American customers can expect to see reductions in monthly electric and/or gas bills, as dozens of American utilities have announced intentions to reduce rates since the TCJA was passed.
President Donald J. Trump’s Tax Cuts Are Boosting American Workers’ Paychecks
In the last week, President Trump’s tax reform has continued to bring benefits to American workers, boosting paychecks and creating bonuses.
WASHINGTON EXAMINER: Anthem Offers $1,000 Bonuses Due to Tax Cut
“Insurance giant Anthem announced it would give $1,000 to the retirement accounts for more than 58,000 employees and recent retirees due to tax reform. The insurer said that overall it will contribute more than $58 million to employees’ 401(k) programs and it is putting together a new investment program based on changes installed from the tax bill passed late last year.”
CNBC: Lowe’s Confirms Plans to Pay up to $1,000 Bonuses
“Lowe’s confirmed Thursday it plans to pay out one-time bonuses and sweeten benefits, saying it expects the impact of new tax law to be positive for its business in 2018. The home improvement retailer is giving more than 260,000 hourly employees bonuses of up to $1,000 and will expand benefits packages — adding adoption assistance and paid parental leave — in the wake of new tax legislation, CNBC reported on Wednesday.”
THE ASSOCIATED PRESS: Best Buy to Hand Out Bonuses to Workers
“Best Buy, the nation’s largest consumer electronics retailer, says it will hand out bonuses to more than 100,000 employees, joining a growing list of U.S. companies sharing a portion of their windfall from the federal tax overhaul with employees. The Minneapolis-based chain on Friday said that this month it will pay one-time bonuses of $1,000 to full-time workers and $500 to part-time employees.”
SIOUX CITY JOURNAL: Tyson to Pay Out $1,000 and $500 Bonuses to Employees
“Tyson Foods, Inc. has announced eligible employees will be receiving $1,000 and $500 bonuses as a result of recent changes to the tax code…. In a statement from president and CEO Tom Hayes, Tyson announced it will give its 100,000-plus worldwide employees (whose pay package doesn’t include an annual bonus) a one-time bonus. Eligible full-time employees could receive a $1,000 bonus, while eligible part-time employees could receive $500.”
THE HILL: Hostess Gives Employees $1,250, Free Snacks after GOP Tax Cuts
“Hostess Brands Inc. announced it will give workers one-time bonuses of $1,250 and one year of free snacks as a result of the new GOP tax legislation…. Workers will receive the monetary bonus in the form of $750 in cash and a $500 contribution to their 401k.”
CNBC: CVS to Hike Wages, Introduce Paid Parental Leave With Windfall from New Tax Law
“CVS Health will increase employee pay and sweeten benefits to some employees using a portion of the company’s windfall from the new tax law. CVS will boost starting pay for hourly employees to $11 per hour from $9 per hour, starting in April…. Full-time employees will qualify for as much as four weeks of paid parental leave, and worker health-care premiums will hold steady at current rates.”
THE HILL: Chipotle Announces New Employee Bonuses, Citing Tax Cuts
“Chipotle employees will see one-time bonuses of between $250 and $1,000, as well as expanded training programs and parental leave, the company announced Wednesday…. Chipotle said Wednesday that tax savings from the new law prompted it to offer its roughly 71,000 hourly and salaried employees the bonuses and new benefits.”
THE ASSOCIATED PRESS: Charter Ups Minimum Wage to $15 an Hour Citing Tax Law
“Charter Communications says it is setting its minimum wage across the board at $15 an hour, citing the impact on its business from the tax overhaul and the repeal of net-neutrality rules. That’s more than double the national minimum wage of $7.25, although it varies by state.”
THE BEAUMONT ENTERPRISE (BEAUMONT, TEXAS): SE Texas Company to Hand Out Bonuses Amid Tax Cuts
“Female-owned engineering company Leak Sealers says it’s handing out bonuses to its 100 employees, joining major retailers like Lowe’s and Walmart Inc. that are investing in workers after Congress approved a tax cut that will help businesses.”
REUTERS: BP to Boost U.S. Investment After Tax Reform: CEO
“British oil and gas company BP (BP.L) will increase investment in the United States after the lowering of tax rates under President Donald Trump, Chief Executive Bob Dudley said on Tuesday.”
FOX BUSINESS: Boeing Boosts Employee Match Program After GOP Tax Cuts
“U.S. airplane manufacturer Boeing (BA) announced Wednesday it will change its policies for volunteer and gift match programs, resulting from the tax reform package signed into law last December. The company announced $300 million in investments and earmarked $100 million toward corporate charitable investments after the legislation passed.”
Tax Cuts and Reforms are Helping American Workers and Businesses
President Trump meets today with workers who are already benefiting from tax reform. These workers represent the many Americans who will be helped by the “Trump Bump” — new bonuses, hiring, and investment by great American businesses.
WASHINGTON EXAMINER: UBS: Biz ‘Optimism Soars,’ 79% Like Tax Bill, 68% Say Firms ‘Already Benefiting’
“The recently approved Trump tax reform package has supercharged business optimism according to global banker UBS. ‘Confidence dramatically higher,’ said the UBS note to investors….UBS said that the combination of a surging U.S. economy, new tax rate cuts, expected infrastructure investments and a significant reduction in regulations has companies, by a two-to-one margin planning to hire more workers and invest more in their companies.”
USA TODAY: Home Depot Giving $1,000 Bonuses to U.S. Workers after Trump Tax Cut
“Home Depot is doling out bonuses of up to $1,000 to U.S. hourly workers, becoming the latest major national employer to hand out checks after President Trump’s corporate tax cut….Workers with at least 20 years of experience will get the full $1,000 bonus, Home Depot spokesman Stephen Holmes said in an email. All hourly workers will get at least $200, he said.”
THE WALL STREET JOURNAL: Pfizer Plans $5 Billion Boost in U.S. Manufacturing from Tax Law Changes
“As a result of savings from the tax changes, Pfizer made a $200 million contribution to the company’s charitable foundation in the fourth quarter, plans to pay $100 million in bonuses to employees and will make a $500 million contribution to its U.S. pension plan by the end of September. The company said it plans to buy back $5 billion in shares this year and invest $5 billion in manufacturing and other capital projects in the U.S. over the next five years.”
THE COMMERCIAL APPEAL (MEMPHIS, TENNESSEE): FedEx Commits $3.2 Billion for Pay Increases, Pensions in Wake of Tax Cut Bill
“FedEx said it would commit more than $3.2 billion to wage increases, bonuses, pensions and expanded capital investment in the United States. The Memphis carrier announced the commitment Friday morning, and said it follows the decision by Congress to pass the U.S. Tax Cuts and Jobs Act. FedEx said it would spend $1.5 billion to expand its hub in Indianapolis over seven years and modernize and enlarge its Memphis SuperHub. More than $200 million in higher compensation is planned with about two-thirds of the amount earmarked for hourly employees and the rest going into performance-based incentive plans for salaried workers. FedEx also would add $1.5 billion to the employee pension plan.”
MILWAUKEE JOURNAL SENTINEL: American Family Insurance Joins List of Companies Giving Bonuses to Employees after Tax Cut
“American Family Insurance said Friday it will give 11,000 workers a one-time bonus of $1,000, becoming the latest U.S. company to pass some of the savings from federal tax reform to employees. The Madison-based insurer said the reduction in the corporate income tax rate also would help fuel permanent changes to its employee benefits program, such as expanded tuition reimbursement, help paying student loans and scholarships for workers who pursue a post-high school degree. In addition, American Family said its family leave program now will provide employees with paid leave to care for an ill child of any age or for a spouse or domestic partner.”
MILWAUKEE JOURNAL SENTINEL: Citing Tax Reform, Town Bank Joins Other Banks in Raising Minimum Hourly Pay to $15
“Town Bank is joining a growing list of Wisconsin and national banks in raising the minimum hourly wage for employees to $15. Town Bank, a Hartland-based bank owned by Wintrust Financial Corp., of Rosemont, Ill., said Wednesday the decision to increase the pay rate for eligible staff ‘comes as a result of the recently enacted tax reform legislation and the bank’s continued commitment to its employees.’ Wintrust said it expects that more than 600 employees will benefit from the pay raise across its family of more than 150 bank locations, including Town Bank’s 19 branches in Wisconsin.”
MILWAUKEE BUSINESS JOURNAL: BMO Harris Bank to Raise Minimum Wage, Charitable Giving Because of Tax Reform
“BMO Harris Bank Tuesday joined other banks, like Green Bay-based Associated Bank, in raising its minimum wage to $15 per hour because of the recent changes to the corporate tax rate. BMO Harris, based in Chicago but with a major presence in Milwaukee, said it will also raise its level of community giving by 10 percent in 2018 because of the tax reform law.”
WDAF-TV: Raytown Company Pays Workers a Tax Reform Bonus
“More than a hundred people work for Dynamic Fasteners, and though it’s not a pass through LLC or a corporation that will see the biggest benefits of a 21 percent tax rate, Owner Kevin Perz says he believes the tax cuts will be so good for the economy that he wanted to make sure he rewarded his employees for their loyalty. ‘We are giving a maximum of $1,000 per full time employee,’ Perz said. ‘It’s $200 for each year or partial year that you’ve been here. If you’ve been here four years and a day you get the thousand dollars. Part time employees get half of that.’ Workers will receive their bonus on February 15. That’s about the same time workers also should notice a boost in their checks from lowered federal tax rates.”
WITN-TV: Greenville Company Hands Out Bonuses, Credits GOP Tax Reform Bill
“A Greenville based company says it is giving all employees bonuses as a result of the GOP tax reform bill. The Hammock Source says employees will be immediately receiving a bonus up to $1,000 determined by the employee’s length of service with the company. The company says they are a direct result of the Republican tax reform bill.”
MINNEAPOLIS/ST. PAUL BUSINESS JOURNAL: Ecolab Says Tax Cuts Will Help Earnings, Allow $25 Million Contribution to Its Foundation
“Ecolab Inc. on Tuesday announced that the recently passed federal tax cuts will boost earnings and that the company will contribute $25 million to its foundation…. Ecolab also cited the tax law as it pledged to make a $25 million contribution to the Ecolab Foundation, which donates to communities where it does business for a wide range of needs, from hunger relief and affordable housing to the arts and education. It also helps global relief organizations during natural disasters.”