With Congress passing a big tax reform package, slashing the tax rates for many American companies, those companies are turning around and passing along the benefits directly to their employees. More than 2 million Americans are supposedly getting a raise or a bonus thanks to package passed last month.
The tax reform bill lowered the corporate tax rate from 35 percent (the highest in the world) to 21 percent, a rate on par with most other industrialized countries. For decades, the United States has had the highest corporate tax rate in the world, and that provided a financial disincentive to invest in the American economy. The change in the law is intended to remove the disincentive. So far, so good.
Americans for Tax Reform has compiled a list of companies that are offering either bonuses or raises to their employees. Many of these companies look familiar.
Alaska Airlines -- $1,000 bonuses for 22,000 employees
American Airlines -- $1,000 bonuses for every employee (excluding officers). The bonuses will total $130 million.
AT&T -- $1,000 bonuses to 200,000 employees; $1 billion increase in capital expenditures.
Baltimore Gas & Electric – the utility is passing on $82 million worth of tax savings, resulting in lower gas and electric bills for customers
Bank of America -- $1,000 bonuses to 145,000 U.S. employees
Fiat Chrysler -- $2,000 bonuses for 60,000 employees; $1 billion investment in U.S. plant in Warren, Michigan; 2,500 new jobs
Southwest Airlines -- $1,000 bonuses for all 55,000 employees; $5 million additional charitable donations
Visa – significantly increased permanent contributions to employee 401(k) accounts
Waste Management, Inc. – $2,000 bonuses to approximately 34,000 employees
Wal-Mart – Base wage increase for all hourly employees to $11; bonuses of up to $1,000; expanded maternity and parental leave; $5,000 for adoption expenses
Wal-Mart is one of the most recent companies to announce a raise and bonus for their employees. Being one of the biggest companies in the country, that will affect a lot of workers. However, shortly after the announcement about increased wages and bonuses, the company also revealed that many of its Sam’s Club stores would be closing their doors.
A total of 63 stores will close, and not explanation has been given except that they underwent a "financial review." As of now, it is unclear how many employees this will affect, but the company said that current Sam’s employees are free to apply for positions at other stores in the company.
Wal-Mart aside, hundreds of companies are passing along new tax benefits directly to their employees. It’s almost as if the government taking less money from these companies resulted in the companies giving additional wages to workers.
This is excellent news for American workers. A slew of benefits are coming to Americans because of the reduction in tax rates. I am hopeful that more bonuses and raises will be handed out over the coming months.
Are you one of the millions of workers benefiting from the new tax law? How so?