The trickle of trickle-down economics has begun as several large corporations, including Comcast and AT&T, announced bonuses for their workers following the successful passing of the legislative tax reform on Thursday.
While the AT&T Inc. (NYSE: T) and Comcast Corp. (Nasdaq: CMCSA, CMCSK) employees no doubt will appreciate their Christmas miracles, there are even bigger boxes under the tree for the companies due to the corporate tax rate being reduced from 35% to 21%.
Once the tax reform is signed into law, AT&T said it would hand out special bonuses of $1,000 to 200,000 of its union US workers. If, as expected, President Trump signs the tax reform into law before Christmas, the bonuses will be issued.
"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," said Randall Stephenson, AT&T chairman and CEO, in a prepared statement. "This 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."
AT&T previously said it would invest $1 billion in the US if the tax reform legislation passed. Last month, the Justice Department sued to block AT&T's deal to buy Time Warner.
Comcast Chairman and CEO Brian Roberts announced Comcast "would award special $1,000 bonuses" to more than 100,000 frontline and non-executive employees.
Roberts also said that Comcast expected to spend more than $50 billion over the next five years investing in infrastructure "to radically improve and extend our broadband plant and capacity, and our television, film and theme park offerings." Comcast said those investments would lead to thousands of direct and indirect jobs.
Proponents of the corporate tax reform have argued that large corporations would create more jobs while also rewarding their employees with improved training, bonuses and higher wages. To which the Democrats in Congress have collectively said: "Bah, humbug!"
In the most recent third quarter, Comcast reported $20.9 billion in revenue, which was slightly down from $21.3 billion a year ago, while AT&T reported revenue of $39.7 billion.
Now that we have some semblance of trickle-down economics in play -- which, by the way, didn't work all that well in the 80s. Maybe our president can also bring back big hair rock bands, pop rocks and mullets.
— Mike Robuck, Editor, Telco Transformation