This would really silence the tax reform critics
Dec 21, 2017, 6:10 AM
Speaker of the House Paul Ryan, R-Wis., joined at right by House Ways and Means Committee Chairman Kevin Brady, R-Texas, meets reporters just after passing the Republican tax reform bill in the House of Representatives. (AP Photo/J. Scott Applewhite)
(AP Photo/J. Scott Applewhite)
All through this tax reform debate, I’ve been arguing that American companies should be bold. They should defy the nattering nabobs of negativism who insist trickle-down economics doesn’t work, and instead boldly turn on the spigot.
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Well, read what Major Garrett reported last night.
“Republicans say these tax cuts are having an immediate impact. Two large banks … announced they’re raising their minimum wage to $15 an hour. AT&T and Comcast say they will be giving most of their employees a $1,000 bonus.”
That tells me that at least some CEO’s get it.
Now let’s look at this more closely. AT&T has about 247,000 employees so that $1,000 bonus will cost the company $247 million.
Last year, AT&T paid $6.5 billion in corporate taxes at the old rate. The new tax rate would cut their tax liability so that everything else being equal — had tax reform been in effect last year — AT&T would have saved $2.6 billion.
So what the workers are getting turns out to be a little less than a 10 percent tip on what AT&T would have saved last year. And in the case of Comcast, it works out to a 7 percent tip.
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But the reputation of trickle-down economics is at stake here. Tip money is nice. But imagine if companies gave the entire tax cut to their employees – which in AT&T’s case would have been a $10,000 raise per employee last year.
That would really silence the critics.
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