On Wednesday, Republican lawmakers along with President Donald Trump passed the largest tax bill in over 30 years. One of the big highlights is the corporate tax rate being slashed down from 35 percent to 21 percent. Many citizens complain that the tax bill heavily favors only the wealthy. Yet, the tax reform will allow for growth for businesses.
In response to the passing of the bill, many corporations began to release statements addressing plans to increasing employee wages, bonuses, expenses, and even donating to charity.
Boeing Co (NYSE: BA) was one of the first to release its statement regarding the tax bill. Boeing said $300 million will be allocated into three investments. A third will be for corporate giving to employees, while the rest will be used to fund training, education, and donate to charity.
"It's [referring to the tax bill] the single-most important thing we can do to drive innovation, support quality jobs and accelerate capital investment in our country," said President and Chief Executive Officer Dennis Muilenburg.
Shortly after, AT&T (NYSE: T)announced its plan to invest an additional $1 billion pending on the bill. AT&T will also hand out $1,000 bonuses to 200,000 of its employees after the bill has been signed said Chairman and CEO, Randall Stephenson.
Comcast Corporation (NASDAQ: CMCSA)announced that based on the tax reform and the FCC’s action on broadband, it will reward $1,000 bonuses to more than 100,000 employees. CEO and Chairman, Brian Roberts, also announced that the company will spend nearly $50 billion in the next years to improve business.
Wells Fargo & Co. (NYSE: WFC)announced to expand ongoing investments pending on the tax bill. If passed, the bank plans to raise minimum hourly pay to $15 per hour from $13.50, donate $400 million to charity, as well as an additional $175 million to support small businesses and programs.
Some analysts viewed the plans by corporations negatively, but for the most part they were seen positively for companies to grow and at the time expand its public relations.
"This is exciting stuff. This is good. This is not just a whole bunch of guys saying I can buy back a lot of stock here and jazz up my numbers through financial engineering,” said Dick Bove, banking analyst at Vertical Group.
This is a bunch of business leaders saying we can use this tax benefit to grow our company, keep our loyal employees and assist the community," added Bove.
Jack Ablin of BMO Private Bank said that other companies may feel pressured to follow the footsteps of companies that announced bonuses, therefore hinting that other companies may begin to hop on.
Once the investment plans begin going into motion, and potentially more companies hopping on, analysts believe that it will help the economy grow better.