From the pages of In Business magazine.
Well, miracles of miracles, the Republican Party got its act together and passed one of the largest tax cuts, along with some tax code simplification, in the nation’s history. Starting this month, workers should notice they are getting more take home pay in the form of less withholding, but that’s the easy part. Now it’s up to employers to demonstrate that a large cut in the corporate tax rate, from 35% down to 21%, also will translate into long overdue wage growth for deserving employees.
The early signs were encouraging, as large corporations such at AT&T, Boeing, Comcast, and Wells Fargo, and medium-sized companies such as Associated Bank announced a combination of wage increases, bonuses, and business development plans, citing the corporate tax cut as the impetus. Associated Bank, in fact, announced that it was increasing its minimum wage to $15 an hour, which is better than having such a wage imposed by the government. The latter can result in job losses as employers adjust to the higher, externally imposed cost.
Hopefully, the wage momentum will continue because that’s always been a promise of this legislation, and with the competition for quality labor as intense as it’s ever been, woe to the employer that doesn’t use the proceeds from this corporate tax rate reduction to keep pace on the wage front — and that applies to businesses large and small.
Having heaped praise on the tax bill, I understand why no Democrat could support it. From their perspective, it contained poison pills such as oil exploration in Arctic National Wildlife Refuge, which secured the vote of Alaska Senator Lisa Murkowski, and an end to the Obamacare mandate tax.
Where I do fault the Dems is the overheated rhetoric they resorted to as they drove down public support for the bill in an effort to defeat it. That was a huge risk because if a substantial number of employers come through for their workers, public opinion is bound to change and those Armageddon comments are going to look mighty silly.
Then again, if large number of employers don’t follow suit with better compensation for deserving employees, they’ll never see another tax cut.
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