Following up on last week's post, AT&T's Tax Cut Bonus Isn't Just A Gimmick:
Wall Street Journal, Timing Is Vital as Companies Set Bonuses, Spending Before New Tax Law:
The timing of AT&T Inc.’s pledge this week to give $1,000 bonuses to more than 200,000 workers once President Donald Trump signs the tax overhaul may have saved it $28 million.
That is because committing to making the payment now could let it record the expense in 2017 for tax purposes. In AT&T’s case, that would mean a $70 million deduction under the existing 35% tax rate. By contrast, recording the bonus expense in 2018, when the new 21% corporate rate is in effect, would mean a $42 million deduction.
Similar calculations may be under way for other businesses that have also promised tax-bill bonuses or are considering charitable contributions or other year-end expenses ahead of the tax-law changes.
Wall Street Journal editorial, The Corporate Tax-Cut Dividend:
Nancy Pelosi has decided that no Democrat, not even the irrepressible Chuck Schumer, is going to outbid her in pouring forth denunciations of the tax reform of 2017. The bill, she says, reflects “the greed of those with power, the cruelty that is in the heart of the tax scam.” Digging deeper into the holiday spirit, she invoked Dickens’ Ebenezer Scrooge and Tiny Tim.
Alas for Rep. Pelosi, the business reaction so far to the tax bill is starting to look like the ending of “It’s a Wonderful Life.” As we went to press, at least six large corporations had announced plans to do more for their employees, explicitly attributing their action to the tax bill’s business tax reforms. ...
If Nancy Pelosi ever did anything in her political career that produced this result from corporations, she’d be dancing down the aisles of the House of Representatives in a Santa Claus suit. Instead, the Democrats are dripping bile on the entire bill. ...
The party this week has issued an all-but-official announcement that its core interests are at odds with those of the entire private economy of business owners and employers. For modern Democrats, the employer class is a lumpen corporatariat, with no other function in the life of the country than to be taxed and regulated. ...
Democrats are betting that the private sector will fail to respond to the tax bill’s incentives. Democrats used to be the party of hope. Now, by their daily admission, they have become the party of hoping that tax cuts will fail and private investment won’t help workers.