Benefits of tax bill already in evidence

THE Republican tax reform bill has been criticized in some venues as little more than a sop to the “1 percenters,” America’s wealthiest. This would come as news to the 55,000 employees of Southwest Airlines — full- and part-timers alike — who will be receiving $1,000 bonuses because of the bill.

Southwest is just one of dozens of companies that have announced they will be forwarding to their employees some of the savings they expect to glean from the reform package. Southwest also plans $5 million in additional charitable donations.

Oklahoma City-based Express Employment Services gave its more than 200 nonexecutive employees an extra $2,000 bonus during the holidays.

AT&T plans to give $1,000 bonuses to 200,000 employees, and a $1 billion increase in capital expenditures. Every employee (excluding officers) at American Airlines will get $1,000 bonuses; the airline has roughly 127,000 workers.

Many Democrats in Congress want to mandate a $15 federal minimum wage, but a number of businesses are doing that on their own due to the tax bill. OceanFirst Financial Corp., Wells Fargo and U.S. Bancorp are among those on the list. (U.S. Bancorp is also giving $1,000 bonuses to its 60,000 employees.) Wells Fargo’s announcement, which includes spending $400 million on charitable donations, “was directly related to the passage of tax reform,” said Ari Sontakay Randolph, the company’s senior vice president.

The tax reform will impact other areas, too. For example, Boeing announced that it plans to spend $100 million in charitable donations, $100 million for workforce development and $100 million for infrastructure and facilities.

Do the wealthiest Americans benefit from the tax bill? Of course. But clearly, so too will Americans across the economic spectrum, whether through a bonus, or a new job, perhaps helping to build the planned infrastructure upgrades.

Express CEO Bob Funk said he expects the new lower corporate tax rate — the legislation cut it from 35 percent, one of the highest in the world, to 21 percent — will translate into an increase in hiring.

“I think we are going to be required to find a lot more people jobs more quickly because at most corporations, including ours, when they have extra cash available, they put it into the industry they know best, which is their own,” Funk said. That’s especially true, he said, for medium and small businesses — the backbone of the U.S. economy.

Not a single Democrat voted for the tax bill. Thus, it isn’t surprising that some Democrats have dismissed these companies’ pledges as publicity stunts. Yet these critics “miss the economywide significance of this investment,” said Andy Puzder, former CEO of the company that owns Hardee’s, Carl’s Jr., and other fastfood restaurants.

“With regulatory relief, tax cuts and the increased business that comes from economic growth, employers now have the resources to bid up wages,” Puzder wrote in The Wall Street Journal. Competition and the attendant higher wages will continue, he argues, provided government stays out of the way.

“Wage growth doesn’t come from government mandates,” Puzder wrote. “It comes from policies that get the economy moving.” The tax bill fits that description.