TAX CUT CAUSES EXECUTIVES TO ENTER POLITICAL DISCUSSION

The executives of corporations have increasingly entered the political fray in one way or another.  For example, multi-national companies tend to support issues such as globalization, trade and immigration, and other companies have supported goals such as protecting the environment, ethnic diversity and gay rights.  In doing so, companies must be concerned about the reaction of customers, politicians and their own employees.  There is always a danger in taking a position opposite to those on the other side of an issue.

Some interesting developments occurred earlier this year on this subject, as corporate America seems to come out in full support of the Administration’s tax cut legislation.  Some polls indicate that a majority of Americans do not favor this bill, saying it favors the rich, but corporate America seems to be trying to support the bill with the public and with their own workforces.  A long list of major corporations in the U.S. have made announcements to that effect.  For example, Apple promises to bring hundreds of billions of overseas dollars back to the U.S., paying some $38 billion in taxes on the money and investing tens of billions on domestic jobs.  Boeing announced it would invest $300 million in employee training and improve workplace infrastructure and corporate giving because of the tax bill.  Fiat Chrysler is investing $1 billion in a Michigan truck factory and paying worker bonuses related to the tax cut, announcing that it is only proper that its employees share in the savings generated by tax reform and the resulting improvement in the U.S. business environment.  AT&T announced that all U.S. workers would get a $1,000.00 bonus to celebrate the tax bill.  Several finance and insurance companies have increased their matching contribution to workers’ 401(k) plans in response to the new tax law.  The list of American companies making public announcements linking improvements in worker pay and benefits to the new tax law is long, including not only the aforementioned companies, but also Wal-Mart, American and Southwest Airlines, Wells Fargo, AutoNation, Nationwide, Aflac, SunTrust Banks, Visa, and the list goes on.

Some unions have announced that they hope the bill will generate job growth and higher wages for working families.  The President seems to be enjoying these developments stating that he believes the tax cut will set off a domino effect that will end lean years for American wage-earners.

At least one company, Pfizer, experienced a bit of a push-back in its announcement.  The chief executive wrote its employees about the tax bill being a landmark measure that would improve American business, while making no mention of higher pay bonuses in the announcement.  One employee in a publicized response asked why the boss was sharing his jubilation at the benefits the company would receive without mentioning that some of the benefits might trickle down to the workers.