Dr. Boozman's Check-up
Feb 05 2018
Despite what you may have heard from those who opposed the Tax Cuts and Jobs Act – including Senate Minority Leader Chuck Schumer, who called the tax cuts “open warfare” against the middle class, or House Minority Leader Nancy Pelosi’s infamous description of the tax plan’s benefits as “crumbs” and the passage of the plan as “The end of the world. Armageddon.” – the economy is responding incredibly well to the changes we made to the tax code.
I’ve long believed that our economy has struggled under the weight of an outdated, inefficient and ineffective tax system. Now, businesses are beginning to do the math and are realizing that the Tax Cuts and Jobs Act will mean more savings. As a result, many have announced that they are passing some of this savings on to their employees or will now be seeking to grow and expand operations. As of today, already three million Americans will be receiving bonuses that stem from tax reform.
This is happening across the country and in Arkansas. Here are just a few examples of companies located in our state or with a sizable presence in Arkansas that will pass along savings to their employees through wage increases, bonuses and other benefits; give to charity; and/or make investments to grow their business and better serve customers:
- BancorpSouth Bank: Pay raises for 70% of employees, $1,000 bonuses for nearly 20% of employees
- Home Bancshares, Inc.: $500 bonuses for 850 employees
- Peoples Bank: $500 bonuses and $50,000 in charitable donations
- Bank of the Ozarks: Bonuses of up to $1,200 for 2,300 employees
- Walmart: Base wage increase for all hourly employees to $11; bonuses of up to $1,000; expanded maternity and parental leave; $5,000 for adoption expenses
- Regions Bank: Minimum wage increased to $15 per hour; $40 million in charitable contributions, approximate $100 million increase in capital expenditures
- Tyson Foods Inc.: Further investment in supply chain and team members
- FedEx: Investing more than $3.2 billion in growing its business — including raising wages and investing $1.5 billion in pension plans
- UPS: Commits $12 billion to expand Smart Logistics Network, increase pension funding and enhance shareowner value
The law is already helping hardworking Arkansans keep more of their money in their own pockets, not only by nearly doubling the standard deduction, lowering rates and eliminating loopholes, but also by creating a climate where businesses are boosting wages and giving employees bonuses as a result of the reduction in the corporate tax rate. Additionally, Governor Hutchinson has instructed the Arkansas Public Service Commission to examine how the new, lower tax rates will benefits the utility providers in Arkansas. He’s encouraging the Commission to instruct utilities to pass savings down to ratepayers, which could mean possible lower utility rates. Also, Arkansas-based companies like ArcBest and MurphyUSA are already reaping the benefits of the new tax system.
This is only the beginning. I believe that we will continue to see positive reactions to the tax law that will help grow our economy and spur even more investment in Arkansas and across the country. I am committed to ensuring the changes we made to the tax code help increase economic activity, address our national debt and create jobs.