HOW RETAILERS ARE RESPONDING TO TAX REFORM
A comprehensive tax reform was highly needed in the U.S if it had to develop its economy, increase the wages as well as advance U.S. competitiveness across the globe. It is for that reason; the retail industry was demanding the Congress to pass such a reform time and again. Luckily, for the retailers, the law of the land is a more competitive tax code. The retailers are considering ways to develop their businesses as well as ways to incorporate savings.
Moreover, the highest effective tax rate of any sector of the U.S. economy was previously paid by the retail industry. So the question arises is that how the retailers are responding to this fairer tax environment?
Additionally, the new tax law took effect only a few weeks before and it seems that the presumptions are already executing. It is because of this tax reform, employers are investing in their workforce, and it is estimated that more than 3 million American workers are receiving bonuses, increased wages as well as expanded benefits. Retailers are leading the way.
- Walmart announced plans to give a one-time cash bonus of up to $1,000 to eligible associates, increase its starting wage to $11 an hour, expand its parental and maternity leave policy and provide adoption benefits.
- Starbucks is investing $250 million in its employees through higher wages, bonuses of up to $2,000, stock grants and paid leave benefits.
- The Home Depot’s hourly associates will receive a one-time cash bonus of up to $1,000.
- AT&T will invest an additional $1 billion in the U.S without tax. in 2018 and pay a special $1,000 bonus to more than 200,000 U.S. employees.
- The Walt Disney Company is giving 125,000 employees a $1,000 cash bonus and investing $50 million in a new higher education tuition reimbursement program for hourly workers.
- McDonald’s will invest an additional $150 million over the next five years into its Archway to Opportunity program due in part to tax reform. By tripling this investment and expanding eligibility for the program, 400,000 employees will have the opportunity to further their education.
We’ll see from tax reform as it ripples through the economy that this news only scratches the surface of the benefits. Due to the diverse nature, different retailers respond differently to this reform. The tax savings will be invested in innovation, technology and expanding online footprint by the retailers. Stronger retail companies, more jobs and higher wages will be the benefits gained through those investments.
Moreover, middle-class consumers are also going to see bigger paychecks as they will identify news to reinvest their businesses. The greatest benefit of this tax reform is that the U.S. economy will boost up, and more opportunities for the American workers will be created.