Although critics claim that tax reform won’t help the middle class enough, several corporations already plan on handing out bonuses and raising the minimum wage for hourly workers now that the law is on the books.
The bill, the first of its kind in 30 years, is not yet on President Trump’s desk, but AT&T, for example, says it will distribute a $1,000 bonus check to about 200,000 of it unionized workers. “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,” said the corporation’s president Randall Stephenson, CNBC reported. The telecommunications giant also plans to invest $1 billion in the U.S. now that the bill has cleared both houses of Congress.
Some AT&T employees might wind up with two grand, “One with a new contract, and one when the tax reform bill is signed.”
Comcast has similarly announced that based on the new tax reform bill, it will hand out $1,000 bonuses to about 100,000-plus frontline and non-executive workers and intends to spend $50 billion over the next five years to upgrade the U.S. broadband infrastructure.
First Third Bancorp is also spreading the tax-reform-related Christmas cheer. Each of its approximately 13,500 employees will receive a $1,000 bonus, and the firm will boost its 3,000 hourly workers to at least the $15 per hour pay rate. CEO Greg Carmichael said that the corporate tax rate reduction in the tax reform legislation allowed it to pass along bonuses and raises to the workforce, BusinessWire explained. Wells Fargo is also increasing its minimum hourly wage to $15 as well as making $400 million in charitable donations in 2018.
It’s quite likely that other big (and perhaps not so big) companies will follow suit in their bonus and pay structure in the post-tax-reform environment. The new law drops the corporate tax rate from 35 percent to 21 percent, which is meant to make the U.S. more competitive with other countries. The law also aims to encourage repatriation of money that corporations have parked overseas as a tax shelter. Tax reform also eliminates the Obamacare individual mandate, meaning that individuals won’t be hit with an IRS penalty if they decline to purchase the one-size-fits-all Obamacare health insurance.
The bill also permits oil drilling in a portion of the Arctic National Wildlife Refuge (ANWR) in Alaska after 40 years of debate.
According to the Washington Free Beacon, under the Tax Cuts and Jobs Act, the official name of the tax reform bill, middle-income families with children are in line for the most financial benefit, the Tax Foundation claims. Other analyses have come up with different findings, which is typical for a complex piece of legislation when partisan politics are at the forefront. Some of the tax cuts aren’t permanent and will require congressional approval down the road to extend them.
The U.S. House of Representatives gave final approval to the tax reform bill by a vote of 224-201 today after the Senate passed it last night on a 51-48 party line vote.
President Trump met with GOP lawmakers this afternoon for a news conference/victory celebration of sorts. There are some procedural requirements that must be met, but the legislation is expected to be ready for President Trump’s signature perhaps by Christmas.