America’s Xmas bonus
£750 handouts for staff as firms pass on tax cuts
HUNDREDS of thousands of American workers have been given a pay bonus as big businesses celebrate getting 1.5trillion dollars in tax cuts.
Some employees have been promised as much as 1,000 dollars (£750) after President Donald Trump overhauled the tax system.
Firms including jet maker Boeing, broadcaster Comcast and telecoms titan AT&T have promised special bonuses, a higher minimum wage and more investment after a massive cut to corporation tax.
The reforms are the most comprehensive overhaul of revenueraising since Ronald Reagan was president in the 1980s.
Business taxes have been slashed from 35 per cent – the highest level of any major Western country – to 21 per cent, which is one of the lowest. And companies have responded by pledging some of the money to employees.
AT&T has promised to hand out a 1,000-dollar 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 reforms are the crowning achievement of the Trump presidency so far, and aim to unlock wealth by reducing the burden on middle-class families.
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. Trump described the bill as ‘an extraordinary victory for American families, workers and businesses’.
Comcast, which owns news channel CNBC, is handing out a 1,000- dollar bonus of its own to more than 100,000 workers and plans to spend more than 50billion dollars (£37billion) 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 per cent to 15 dollars (£11.20) in March. The lender – which was this year rocked by a scandal over putting staff under such high pressure they opened millions of fake bank accounts to hit targets – added it will give 400million dollars (£300million) 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.’
Aircraft maker Boeing plans to spend an extra 100million dollars (£75million) on employee training and use another 100million dollars to upgrade factories.
Boss Dennis Muilenburg said: ‘Each of these investments benefits Boeing’s most important strength – our employees – and reflects the real-time impact and economic benefit of the reforms.’
As well as the corporation rate cut, there is relief for the tax on profits held abroad by US companies. The historically high tax rate led titans such as Apple and Google owner Alphabet to build up 2.6trillion dollars (£1.94trillion) of overseas reserves. Trump now hopes this money will be brought back and invested in the US.
THE Mail holds no torch for Donald Trump. But nor do we support those hysterical critics on the British Left, who argue that his $1.5trillion tax revolution will benefit only the rich and is nothing more than a bung to corporate America.
For as well as enjoying lower income taxes, US workers are also set to share the benefits of lower business taxes. Already several leading firms say they will increase wages and others, including telecoms giant AT&T, are to hand employees $1,000.
The corporation tax cut from 35 per cent to 21 will create jobs, and an amnesty allowing firms to repatriate billions held offshore without punitive penalties could hugely boost revenues. With our close trading links, a growing US will doubtlessly provide a fillip to the UK economy.
So while the Mail is no cheerleader for Mr Trump, who is in many ways an irresponsible, narcissistic monster, we quietly predict his tax reforms could prove a success.
There are also clear lessons for this country, where Tory politicians – instead of posing as Labour lite – should be boldly making the case for tax cuts and spelling out the dangers of Jeremy Corbyn’s crippling tax hikes. Instead of cosying up to the Labour leader, UK firms and banks should be vigorously confronting his Shadow Chancellor’s La La Land economics.
And since corporate Britain’s tax bill has plummeted in recent years, how about wage hikes for their hard-working staff?