Anti-Trump activists no match for tax reform-fueled bonuses
Tom Steyer will spend $30 million to help Democrats retake the House in 2018. His goal is to impeach President Trump. Lining up against Steyer and other liberal anti-Trump activists are hundreds, maybe thousands, of American businesses who are sharing the bounty of the GOP tax cuts with their employees.
Can monies spent vilifying President Trump drown out the tidal wave of bonuses and wage hikes being given to workers across the land in response to the GOP tax bill? Democrats have a lot riding on the answer.
That may be why the liberal press is quick to dismiss the payouts. The New York Times, for instance, asked, in a recent headline, “Is It a Publicity Stunt?” The accompanying article answers the question as you might expect, hinting that most firms announcing payouts have business before the government and are giving out bonuses in an effort to butter up President Trump.
Some firms may indeed consider the raises and payouts good public relations. AT&T, whose acquisition of Time Warner has been blocked by the Justice Department, was one of the first to act, promising $1,000 bonuses to more than 200,000 employees.
CEO Randall Stephenson also committed to an extra $1 billion in capital outlays, citing the expected drop in taxes. Nothing is dearer to the heart of the president, who has spoken out against AT&T’s purchase, than seeing businesses invest in the United States.
Similarly, Comcast, which will likely benefit from the Trump administration’s move to overturn President Obama’s net neutrality diktats, announced soon after the tax cuts passed that it would pay an extra $1,000 to more than 100,000 workers, citing both the favorable FCC ruling and the tax benefits.
But the advantages that some large corporations might see in publicly applauding the tax cuts doesn’t explain the profusion of small firms that have lined up to do the same. All kinds of companies are giving out benefits: banks, airlines, telecom companies, weather forecasters, real estate developers, car dealers, aviation firms, assisted living operations, supermarkets, engineering firms, wineries, pay-per-click advertisers, insurers and scores of others. What’s driving those folks?
CEO Rene Banglesdorf of Charlie Bravo Aviation in Georgetown, Texas, committed to handing out $1,000 bonuses to her company’s six employees. Especially helpful to their operation, which sells and leases pre-owned aircraft, was that the bill allows immediate expensing of new and used equipment purchases.
Previously, only new items qualified for write-offs. Banglesdorf noted that 85 percent of general aviation use in the U.S. was tied to small and mid-size companies. Those folks, she sayid, are especially optimistic about the impact the tax bill may have on their businesses.
“The volume of calls, serious call, in mid-December more than doubled,” she said.
Similarly, Aaron Schwartz, CFO of Mid-Am Metal Forming in Rogersville, Missouri, told me that his company will hand out bonuses to their 140 workers because the tax bill was a boon to the owners of small companies like theirs.
The family-owned specialty manufacturing outfit will save on taxes thanks to the more generous treatment of pass-through entities.
“As a manufacturer, we’ll lose the domestic production activities deduction, which was 9 percent, but we gain from the 20-percent deduction on pass-through income,” Schwartz said.
Schwartz is optimistic about the future of the company, especially as much of their work stems from large construction projects, and the tax bill holds benefits for developers. At the moment, Mid-Am is supplying aluminum for the remodeling of the Miami Convention Center. They are hopeful more such mega-projects will come their way.
Jordan Wineries in Healdsburg, California, is paying each of its 85 employees a $1,000 bonus, because CEO John Jordan says he wanted to “combat the narrative that working people are not benefiting from the tax bill.”
“My employees’ paychecks will grow,” Jordan said.
His firm will benefit too. In particular, Jordan will take advantage of the immediate expensing of capital investments.
In Idaho, some 30 businesses, including the Eagle Ridge Ranch and DePatco, a construction company headquartered in Idaho Falls, have taken up the VanderSloot challenge, posed by the CEO of Melaleuca, a $2-billion a year online wellness-shopping club.
CEO Frank VanderSloot offered bonuses to his workers, and pitched others to do the same:
“We’re going to have more money in our pocket and that means we can afford to give our employees more,” he said. “I’m challenging all other companies in Idaho to do the same.
“We wouldn’t have our companies without our employees. They mean everything to us!,” he said.
These responses are poison to Democrats. They fear the success of the GOP tax cuts, which they continue to claim (erroneously) will only benefit the rich and big business. Sen. Chuck Schumer (D-N.Y.) called it a “punch in the gut to the middle class.”
But already more than one million middle-class workers are getting an immediate lift from the tax bill — a bill that every single Democrat voted against. Are they buying Schumer’s description?
President Trump has made growing the economy and creating jobs his No. 1 goal. He has accomplished much. Even the New York Times acknowledged that the president’s efforts to roll back red tape and cut business taxes has boosted confidence, which has led, finally, to an upturn in corporate capital spending.
That rising capital investment will increase productivity, and help push wages higher. That virtuous cycle is underway and will gather steam this year. Faster growth, higher wages, lower taxes; Tom Steyer’s millions are no match for that.
Published on The Hill
