As President Donald Trump was prepared to speak in Davos to announce that America is open for business, House Minority Leader Nancy Pelosi (D-Calif.) is predicting Armageddon because of the tax cuts. To be fair, she says that a lot. She further insulted the tax cuts calling the $1,000-$2,000 bonuses hundreds of employees are receiving "crumbs," forgetting she once calleda $40 cut a "victory for America" in 2011. The Minority Leader might want to pay better attention to what is happening to the economy because it looks like 2018 could be a banner year for the Trump economy.
The first company to announce it would pass on the corporate tax benefits to its employees was AT&T. Shortly after a deal was reached in the Senate, the corporate giant announced a $1,000 bonus for 200,000 employees and is increasing its capital expenditures by $1 billion. AT&T chairman and CEO Randall Stephenson stated, "Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world. Tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees."
For years the left has fought ferociously to get the federal government to institute a $15 minimum wage. Several cities around the nation have done so and seen an exodus of business from cities. The tax cuts signed by President Trump did more for the $15 minimum wage fight than anyone thought possible. Shortly after the signing of the bill, Wells Fargo raised their base wage by $1.50 to $15 per hour. Discover Financial Services and Humana are two more large companies raising their minimum wages to $15 per hour.
If there is an official coffee house of "the resistance" it is Starbucks. Despite this, they are not shy about participating in the bounty brought on by the tax cuts. On Tuesday, the company announced it would increase wages and benefits for its 150,000 employees as a direct result of the tax cuts. As part of the new benefits package, the company is awarding more than $100 million in stock grants to its employees. Thanks to the Trump tax cuts, companies are sharing profits with employees is now more likely.
Apple CEO Tim Cook may not like President Trump personally, but he loves his tax cuts. Last week the technology giant announced plans to build a second corporate campus in the U.S. and increase its U.S. workforce by 20,000 people over the next five years. Additionally, Apple was famous for housing billions in overseas profits offshore and refusing to repatriate the money because of high U.S. corporate taxes. Thanks to the tax cuts, Apple announced it would repatriate billions from overseas, estimating the tax bill would be $38 billion for the repatriation. All told, Apple estimated its actions will generate $350 billion in economic activity for the U.S.
The corporate tax cuts will have a massive impact on stock dividends. Many people may not think they are invested in the stock market, but if they have a 401(k), an IRA, or pension plan, they are invested in the stock market. Wall Street analysists are revising up their estimated dividend returns for several stocks. Lowes, Pepsi, and Proctor and Gamble are just a few of the stocks analysts expect to increase their dividend payout by as much as 60 cents per share.
Multiple reports have indicated the tax cuts are making the U.S. the destination for investment. Heather Long, of the Chicago Tribune, reports, "Blackstone chief executive Steve Schwarzman, Credit Suisse chief executive Tidjane Thiam and NASDAQ chief executive Adena Friedman said they, too, were hearing about more plans to invest in the U.S. now." Nothing boosts an economy like Foreign Direct Investment, and the tax cuts are a signal to the world where they should invest their money.
Not only did the tax cuts help the U.S. economy, but the cuts are also going to have a positive effect on the global economy. In October, the International Monetary Fund (IMF) predicted global growth of 3.9 percent for 2018 and 2019. The latest report from the IMF increases the expected growth by .2 percent, with half the increase coming because of the tax cuts. Increasing global GDP by at least $75 billion is hardly Armageddon.
These are just a few of the examples of companies giving their employees bonuses and pay raises because of the tax cuts. Americans for Tax Reform compiled a list of hundreds of corporations paying the tax cuts forward, so far totaling more than 3 million people.
James Carville once said, "the economy, stupid" when asked how Bill Clinton won the Presidency in 1992. President Trump has sent the message to Davos at the World Economic Forum that America is open for business. Thanks to his tax cuts the world is listening.
Bonuses in the thousands. Pay raises to and above the progressive's ideal wage of $15 per hour. Hundreds of billions in capital investment that leads to more jobs and tax revenue. Does this sound like crumbs? All this is happening before anyone has seen the increase in pay their paycheck, which doesn't happen until February. The Minority Leader may want to give James Carville a call.
Printus LeBlanc is a contributing editor for Americans for Limited Government.