The almost daily announcements sound impressive and generous: American Airlines, AT&T, Bank of America and Comcast are giving their workers $1,000 bonuses. Since President Donald Trump signed the sweeping tax cuts that slashed what corporations pay, dozens of companies have announced payments to employees. Fiat Chrysler said it will hand out $2,000 bonuses and add 2,500 jobs in Michigan.
Trump and Republican leaders in Congress are boasting that their tax bill is already paying off big time for American workers.
The tax reform permanently reduces the corporate tax rate from 35 percent to 21 percent. Also, money that companies bring back from overseas this year will be taxed at 15.5 percent.
I have criticized the tax cuts as mostly a giveaway to the rich and to corporations. I'm more than willing to admit if I'm wrong. But here's the thing: All of these bonuses could be fool's gold.
They will certainly help workers in the short term. For many families, they are more than "crumbs," as top House Democrat Nancy Pelosi of San Francisco described them.
But what about the long haul? Will employees get another round of bonuses next year, or is this a one-time thing?
Analysts point out that it would be much better for workers if they received permanent raises. They also note that what companies are handing out in bonuses is small potatoes compared to the windfall for corporations--about $1 trillion of the $1.5 trillion in tax savings over 10 years. Some say the bonuses are more a public relations ploy, and even a way to get on Trump's good side.
I'll be far more impressed if lots of companies hire many more workers and pay them more and all of this progress lasts.
Editorial on 01/21/2018