By now a couple hundred of the largest companies in the U.S. have either given a bonus or raised the wages of their employees in response to the steep cut in corporate taxes from 35 to 21 percent. While that’s an impressive number of companies, it means hundreds more have not announced any benefit to employees.
Over the next few months you can expect the media to increase focus on a) how much money companies will save, b) where/how they will decide to spend (or not spend) it, and c) what questions those choices will raise, or answer, about the ways in which the new bounty of tax cuts is stimulating the economy for everyday Americans. Soon you will see direct comparisons between the cost of those one-time bonuses (relatively minor) and the full size of each company’s tax windfall (huge).
A couple of weeks ago I moderated a Page member conference call exploring how companies are making decisions about where and how to spend their tax cuts. I took away a few thoughts:
In my view, there is a brooding storm on the horizon. Economic expansion is great, but capitalism that almost exclusively benefits top executives and shareholders combined with rising income inequality is a recipe for disaster. The rising tide should lift all boats, and our role as leaders requires that we advocate for that. Otherwise, there will be big, fair questions asked, and the answers won’t be easy.
I would like to thank the 30+ Page members who participated on that conference call. Page is doing more of these impromptu conversations about pressing issues, looking to get members more engaged in sharing their knowledge and insights with one another. If you’re a member, I hope you’ll try to join one in the future.
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