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The AP’s Paul Wiseman reports that on December 26, 2017, President Trump signed the GOP’s tax bill into law. By slashing the corporate tax rate to 21% from 35%, one of the highest among advanced economies, the new law distributes benefits across a range of American industries, from construction to health care. It also applies a low one-time tax to the profits that corporations have long kept overseas to avoid paying taxes under the current higher rate.
According to an analysis by the University of Pennsylvania’s Penn Wharton Budget Model:
- The biggest tax savings from 2018 through 2027 go to manufacturers ($261.5 billion).
- Next are insurance and finance companies ($249.4 billion).
- Retailers will save $171.4 billion. Matthew Shay, CEO of the National Retail Federation, says the new law will help retailers accelerate investment in e-commerce and mobile technology, as well as induce foreign-owned retailers to shift investment dollars into the United States.
The new tax plan has already brought fruit in companies giving raises to their employees (see below), as well as plans to increase their U.S. investments. As WND puts it:
“Before the ink was even dry on President Trump’s signature on the Republican tax-cut bill, corporate America was not only toasting it, praising it and celebrating it, but handing out money to employees like Santa Claus.”
The Wall St. Journal reports:
“Just weeks after the federal government adopted the biggest tax overhaul in three decades, the effects are rippling through corner offices and boardrooms, with companies large and small dusting off once-shelved plans, re-evaluating existing projects and exploring new investment in factories and equipment.”
But the Demonrat governors of Connecticut, New Jersey and New York said they will file a lawsuit to block the tax overhaul. California, also a “blue” state, may join the lawsuit.
The AP reports that on Friday, Jan. 26, 2018, governors Andrew Cuomo of New York, Dannel Malloy of Connecticut and Phil Murphy of New Jersey announced that they’re talking to governors of other states to form a multi-state coalition in a lawsuit to block Trump’s tax reform because the new tax law caps a deduction for state and local taxes at $10,000 — and Connecticut, New York, New Jersey, California all exact high state taxes. This means that in the past, before the Trump-GOP tax reform, the federal government effectively had been subsidizing residents of those states by allowing them to write off their state taxes.
Cuomo, a potential 2020 White House contender, had announced his intention to fight the tax overhaul earlier this month. Murphy said he expects the suit to be filed within weeks. Malloy said no decision has been made on where the action will be filed.
(1) AAON is giving $1,000 bonus checks to 2,000 employees. CEO Norman Asbiornson said it was a result of the new tax law and a “direct recognition” of his employees’ importance.
(3) Aflac is increasing its 401(k) match from 50% to 100% on the first 4% of compensation plus a one-time $500 contribution to every employee’s 401(k). It also plans $250 million increase in U.S. investment.
(4) American Airlines will give $1,000 bonuses to its nearly 128,000 employees except officers.
(5) Americacollect announced $300-$500 bonuses for 250 employees.
(6) American Savings Bank, the third-largest bank in Hawaii, said it will award $1,000 bonuses to nearly all of its employees, as well increase its starting wage from $12.21 to to $15.25 an hour.
(7) Aquesta Financial Holdings in Cornelius, N.C., will raise hourly pay to $15 and give $1,000 bonuses to all of it workers.
(8) Associated Bank in Wisconsin boosted its minimum hourly wage to $15 and paying workers a $500 bonus.
(9) AT&T will expand its bonus program to an additional 200,000 staffers getting $1,000 apiece.
(10) Bank of Hawaii, the state’s second-largest bank, will give $1,000 cash bonuses to 2,074 employees, or 95% of its workforce. The bonuses affect all employees below the senior vice president level. The bank also will increase its minimum wage from $12 to $15 an hour.
(11) Bank of the Ozarks announced bonuses of up to $1,200 for 2,300 workers.
(13) Boeing announced a gift of $300 million in investment in its employee-related charitable program “to support our heroes, our homes and our future.”
(14) Canary LLC will hire new employees and purchase more equipment.
(16) Citizens Financial Group will give $1,000 bonuses to 12,500 employees, and $10 million donations to charities.
(17) Comcast NBC Universal, citing the new tax law and the FCC’s elimination of “net neutrality” of government regulation of the Internet, announced $1,000 bonuses to more than 100,000 non-executive employees, as well as plans to spend more than $50 billion in the next five years on infrastructure investments which will create thousands of new direct and indirect jobs.
(18) Comerica Bank is raising wages to $15 per hour and giving bonuses of $1,000 to 4,500 non-officer employees.
(19) Commerce Bank is giving $1,000 bonuses for fulltime workers, $250 for part-timers, to a total of 3,450; as well as $25 million donations to charities.
(20) Community Trust Bancorp has $1,000 bonuses for full time employees and $500 for those who are part-time.
(21) Copperleaf Assisted Living has bonuses of $200-$600 for 175 employees.
(23) Delaware Supermarkets Inc. announced $150 extra bonuses to 1,000 non-management personnel.
(24) Express Employment Professionals announced bonuses of $2,000 to more than 200 non-executive employees.
(25) FedEx announced it will give wage increases and bonuses, make a voluntary $1.5 billion contribution to the company’s pension plan, and reinvest and modernize. Compensation will be increased by more than $200 million, with about two-thirds going to hourly workers. The rest of the money will fund increases in performance-based incentive plans for salaried personnel. The company will also invest $1.5 billion to expand its FedEx Express facility in Indianapolis over the next seven years. Later this year it will announce plans to modernize its Memphis hub.
(26) Fifth Third Bancorp increased its minimum wage to $15, and a a bonus of $1,000 to 13,000 employees.
(27) First Hawaiian Bank, the state’s largest bank, will give out $1,500 cash bonuses to 2,264 employees or all but 11 members of its senior management team, as well as increase its minimum wage from $12.75 to $15 an hour for 613 employees.
(28) First Horizon National Corp. announced 4,000 workers are getting $1,000 bonuses.
(29) Gate City Bank gave $1,000 bonuses to 538 non-management personnel, as well as $500,000 in additional charitable giving.
(30) Home Depot, with over 400,000 Americans on its payroll as of 2017, announced “a new one-time cash bonus for U.S. hourly associates of up to $1,000 in the fourth quarter of fiscal 2017.” Craig Menear, the chairman, CEO and president of Home Depot, said in a statement: “We are pleased to be able to provide this additional reward to our associates for continuing to deliver outstanding customer service. This incremental investment in our associates was made possible by the new tax reform bill.”
(31) INB Bank is giving $500 bonuses to 200 employees, and raising base wages to $15.
(32) Kansas City Southern, the Missouri-based transportation holding company with railroad investments in the U.S., Mexico and Panama, said it would immediately give a one-time $1,000 bonus to non-executive employees of its subsidiaries in the U.S. and Mexico.
(33) Kroger CEO W. Rodney McMullen said the new tax law would influence his company “to continue to invest in our business, which will grow jobs.”
(34) Melaleuca Inc., the Idaho health-care and home-products company, is providing its 2,000 employees $100 bonuses for every year they worked for the company. The company has 147 employees who have worked for the company for 20 years or more.
(36) Nationwide Insurance is giving 29,000 workers $1,000 bonuses.
(37) Navient announced a $1,000 bonus to most of its 6,700 workers.
(38) Nelnet announced $1,000 bonuses for 4,100 employees.
(40) Ohnward Bancshares handed out $1,000 bonuses for all 260 employees.
(41) Pinnacle Bank had $1,000 bonuses for 1,007 employees.
(42) PNC Financial Services will give $1,000 bonus to about 47,500 workers.
(43) Royal Hawaiian Heritage Jewelry plans to open up three more shops – in Honolulu, in Kauai and Maui in addition to its existing three shops.
(44) Rush Enterprises of Texas is giving each of its 6,600 employees a $1,000 bonus – a total of $6.6 million. CFO Steven Keller said: “You’ve got a choice – we could’ve kept it and stuffed it in the company bank account or coffers, or we can share it with the people.”
(46) Southwest Airlines gave $1,000 bonuses to 55,000 employees, provided $5 million additional charitable donations.
(47) Starbucks, citing the GOP’s tax reform bill, Starbucks announced it will give pay raises and stock grants to its 150,000 employees, most of whom work as baristas or shop managers. Starbucks will also the tax break for some pro-family measures: All employees will soon be able to earn paid sick time off, and parental leave benefits will include all non-birth parents.
(49) The Flood Insurance Agency had $1,000 bonuses for 17 full time employees.
(50) Territorial Savings Bank had $1,000 bonuses to 247 employees.
(51) Turning Point Brands, Inc. had $1,000 bonuses for 107 employees.
(52) Unity Bank will give a $750 bonus to all 200 non-executive employees.
(53) U.S. Bancorp, the parent company of U.S. Bank, announced a $1,000 bonus for nearly 60,000 employees. The bank also plans to increase its minimum wage for all hourly employees to $15 per hour, make “enhancements” to its employees’ health-care options, make an “additional investment in strategic projects centered on the customer experience” and make a one-time $150 million contribution to the U.S. Bank Foundation, the bank’s charitable arm.
(54) U.S. Bank of America employees making up to $150,000 per year in total compensation – about 145,000 teammates – will receive a one-time bonus of $1,000.
(55) Walmart is increasing the minimum hourly wage for its U.S. employees to $11 and handing out bonuses of up to $1,000, crediting President Trump’s tax cut. Walmart is the nation’s largest private employer, with more than 1 million U.S. hourly employees.
(56) Washington Federal in Seattle will increase wages for most of its workers by 5% and adding 25 people to its information-technology staff.
