USA’s yuletide bonus
Firms vow to gift workers $1,000 in tax-cut bonanza
HUNDREDS of thousands of American workers have been given a pay boost as big businesses celebrate $1.5trillion in tax cuts.
Some employees have been promised bonuses of as much as $1,000 (€840) after President Donald Trump overhauled the tax system.
Firms including jet maker Boeing, broadcaster Comcast and telecoms titan AT&T have promised bonuses, a higher minimum wage and more investment after a massive cut to corporation tax.
The overhaul is the most comprehensive reform to revenue raising since Ronald Reagan was president in the 1980s.
Business taxes have been slashed from 35% – the highest level of any major Western country – to 21%, which is one of the lowest.
And companies have responded by pledging to pass some of the money on to their employees.
AT&T has promised to hand out a €1,000 bonus to 200,000 staff who are union members.
Chief executive Randall Stephenson said: ‘Congress, working closely with the President, took a monumental step to bring taxes paid by US businesses in line with the rest of the industrialised world. This tax reform will drive economic growth and create goodpaying jobs.’
The company is locked in a row with the Justice Department over a planned $85billion merger with rival Time Warner, which President Trump has previously warned is ‘not good for the country’.
Comcast, which owns news channel CNBC, is handing out a $1,000 bonus of its own to more than 100,000 workers and plans to spend more than $50billion on new broadband, TV, film and theme park infrastructure in the next five years.
The company said its announcements are ‘based on the passage of tax reform’.
Meanwhile, big bank Wells Fargo is increasing the minimum wage for its staff by 11% to $15 in March. The lender – which was this year rocked by a huge scandal over putting staff under such high pressure that they opened millions of fake bank accounts to hit targets – added it will give $400million to charity next year.
Boss Tim Sloan said: ‘We believe tax reform is good for our US economy and are pleased to take these immediate steps to invest in our team members, communities, small businesses, and homeowners. We look forward to identifying additional opportunities for Wells Fargo to invest.’
Ohio-headquartered lender Fifth Third Bancorp announced it will give more than 13,500 staff a $1,000 bonus and will increase its minimum wage to $15 – meaning 3,000 employees will get paid more permanently.
Chief executive Greg Carmichael called the tax cut ‘good for our communities, employees and Fifth Third Bank’.
He said: ‘We want to invest in our most important asset – our people. Our employees drive our reputation, our business and our success.’
Aircraft maker Boeing plans to spend an extra $100million on employee training and use another $100million to upgrade factories.
The tax reforms are the crowning achievement of the Trump presidency so far, and aim to unlock wealth by reducing the burden on middle-class families.
As well as the corporation rate cut, there is also relief for the tax on profits held abroad by US companies. The historically high tax rate has led titans such as Apple and Google owner Alphabet to build up $2.6trillion of overseas reserves, and it is hoped this money will now be brought back and invested in America.
Income taxes are also being cut at all pay levels so consumers keep more of the money they earn, although this change will only last until 2025 unless lawmakers extend it.
President Trump described the bill as ‘an extraordinary victory for American families, workers and businesses’.
However, opponents have claimed it mostly benefits the rich and will actually leave lowerincome families poorer in the long run.