You are here
Wells Fargo, AT&T try to show unpopular tax cut helps workers
[NEW YORK] Looks likes corporate America is trying to sway public opinion on the unpopular tax bill - or at least gain favor with the president.
Donald Trump has touted the legislation as benefiting the middle class, even though a majority of Americans say it will help the wealthy. In the run-up to the bill's passage, US chief executives had made few specific promises about using savings from a big reduction in the corporate tax rate to create jobs or invest in the country. That changed on Wednesday.
As the bill raced through Congress, Boeing announced it would invest US$300 million in a combination of employee training, improved workplace infrastructure and corporate giving. About an hour later, AT&T said 200,000 US workers - including all union members - would each get a US$1,000 bonus to celebrate. Mr Trump cited AT&T's plan at a news conference Wednesday.
"That's because of what we did," Mr Trump said. "So that's pretty good."
Fifth Third Bancorp went further, saying it would raise its minimum hourly wage to US$15 and distribute a US$1,000 payout to 13,500 employees. Wells Fargo, the nation's largest mortgage lender, joined Fifth Third on the pay raise to US$15 an hour, while also pledging US$400 million to community and non-profit organisations next year. Cable giant Comcast said about 100,000 workers would get US$1,000 holiday bonuses and pledged more than US$50 billion in infrastructure investments over the next five years.
"We want to invest in our most important asset - our people," said Fifth Third chief executive officer Greg Carmichael. "Our employees drive our reputation, our business and our success."
It remains to be seen whether the efforts will warm Americans up to the tax overhaul. Only 24 per cent think the plan is a good idea, and almost two-thirds believe it was designed to help the wealthy, according to an NBC News/Wall Street Journal poll released Tuesday.
Several trade groups issued statements in praise of the bill Wednesday, including the biotech and airlines industries, saying the tax cuts will boost employment and investments.
The bill promises to become one of the biggest issues in the 2018 elections that will determine whether Republicans retain their majorities in Congress.
The companies that publicly celebrated the tax bill are all regulated by and do business with the federal government, so a little cheerleading couldn't hurt. AT&T in particular could use some positive vibes from the Trump administration, whose Justice Department is suing to block the phone carrier's US$85.4 billion acquisition of Time Warner.
Chuck Schumer, the New York Democrat and Senate minority leader, cited the pending merger in a statement about AT&T's bonus. And he said the payout to workers is the exception to the rule, with other big corporations focusing on share buybacks in anticipation of the tax reform.
"There is a reason so few executives have said the tax bill will lead to more jobs, investments, and higher wages - because it will actually lead to share buybacks, corporate bonuses, and dividends," Mr Schumer said in a statement.