Tax cuts for corporations
The Senate and House of Representatives voted to cut the corporate tax rates from 35% to 21% (see this article discussing the bill). These tax cuts are supposed to help spur American companies into even more growth and job hiring, further helping the economy. The economy is doing pretty well regardless right now, but that’s beside the point.
Use It, Or Lose It
Well, most companies are going to use the money they won’t be spending in taxes in some manner. Since no strings were attached to how the savings should be spent such as “must hire x% amount of workers in order to be eligible to have the 21% rate”, we have to instead simply hope on the goodwill and common sense of organizations to use the money wisely.
AT&T, a company I would rarely give any sort of praise at all, is going to give 200,000 employees a $1,000 bonus along with $1 billion in investment in 2018 in the country per this Forbes’ article. Other companies also indicated increasing minimum starting wages, buying back debt and buying back stock shares. These all seem to be in line with common sense on how to use the money best in order to increase profitability.
Netflix had other ideas, though. It has decided the best use of the tax money would be to increase executive salaries by a lot. See this article on how they’ve decided to help out America with the tax cuts.
I’ve decided that I won’t be buying shares of Netflix anytime soon. I didn’t have plans to do that, but now I won’t have plans to do that. This is the very type of claims on what would happen to the tax savings from the media and countless Americans outside of the corporate realm. Way to go Netflix for proving them right. Did you really need more bad publicity this year?