GOP tax bill: Analysts say jury is still out on long-term gains.

Businesses hiked spending, but some decisions made before cuts

WASHINGTON» Southern California biotech giant Amgen Inc. opened its first stateof-the-art factory in Singapore in 2014 and executives were preparing late last year to pick the spot for a second one.

Then they hit the pause button. Congress was closing in on a sweeping $1.5-trillion Republican tax bill with major benefits for U.S. businesses. If the legislation passed, domestic locations would vault into stronger competition with sites abroad to land a factory that would cost as much as $300 million to build, said David Meline, Amgen’s chief financial officer.

“We were actually considering doing it in December and I said, ‘It looks like tax re- form might occur,’ ” he said. “So we held up the decision for a couple of months with the possibility that … the business case in the U.S. might be competitive with other global choices.”

The bill was approved and signed into law by President Trump in the final days of 2017. This spring, Amgen announced it would build its new factory at its West Greenwich, R.I., campus at a cost of about $165 million.

Five months after the tax law went into effect — highlighted by a slash in the corporate rate to 21 percent from 35 percent — U.S. companies have ramped up their domestic spending.

A closely watched measure of business capital investment growth in the U.S. jumped to a 9.2 percent annual rate in the first quarter of the year, the best since 2014, according to the Commerce Department. Kevin Hassett, a top economic advisor to President Trump, boasted this week that “you can see capital spending skyrocketing just as we said it would.”

But many of those spending decisions were made months, if not years, before.

Although surveys show businesses are planning to do more spending, experts said that it’s unclear if the law will produce the big sustained boost to capital investment that its supporters have promised. Add in the potential for a global trade war, which would dampen business spending, and it’s going to take a while to determine the tax bill’s effect.