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America's 15 largest companies on tax reform Reform: CVS says less tax means more jobs.

Byline: Heather Long The Washington Post

WASHINGTON President Donald Trump and Republicans have repeatedly sold their tax bill to the public as a way to make American businesses more competitive so that companies will turn around and hire more workers and raise wages. Critics of the plan say the massive reduction in the corporate tax rate from 35 to 21 percent, among other changes favoring business, will mostly lead to more money in the hands of shareholders.

The Washington Post looked at what Americas 20 largest companies in the Fortune 500 say about taxes. Nearly all have vocally supported the GOP bill. Many say at least some of the extra money would probably go to shareholders via higher dividends. Other popular plans for additional cash include: looking for other companies to buy and paying down debt. Only two AT&T and CVS 5 have made explicit promises to hire workers. Apple and Kroger executives have made vague statements that they would probably hire more people. Not a single company has said it will raise wages, although AT&T announced a one-time special bonus for workers after Trump signs the bill. As executives analyze the final 500-page bill, heres what they say so far about their plans.


Plans to invest $1 billion more.

Current effective tax rate: 32.7 percent

AT&T announced Wednesday it will give its 200,000 U.S. workers a $1,000 "special bonus" because of the tax bill, but the company stopped short of raising wages.

Berkshire Hathaway

CEO doesnt think tax cuts are needed.

27.5 percent tax rate

Berkshire Hathaway chief executive Warren Buffett said in October: "It would be good for a million shareholders of Berkshire in terms of their net returns." But he added: "I dont think I need a tax cut."


Vague pledge to hire more in the United States.

25.5 percent tax rate

Apple CEO Tim Cook said in November: "I believe that tax reform is sorely needed in this country. . . . The biggest issue with corporations is that if you earn money outside the United States, which most companies increasingly will . . . the only way you can bring it into the U.S. and invest is if you pay 40 percent [tax]. This is kind of a crazy thing to do, so what do people do? They dont bring it to the United States. . . . In my view, it should have been fixed years ago, but lets get it done now."

When asked by NBCs Lester Holt whether he expected Apple to use

residuals to add more jobs, Cook said: "Yeah, I do."

CVS Health

Pledge to hire 3,000 more workers.

39 percent tax rate

CVS Health announced in October it would create 3,000 permanent jobs if corporate tax rates went down. CFO David Denton said in November: "To the degree that we have [tax] relief, theres a lot of investments that we think we can make within our business model that can more rapidly expand our business model across the country and deliver better care and higher quality and lower cost. So we would look to take the benefit of that and invest it clearly."

Exxon Mobil

Priority is dividends.

Negative tax rate last year, although Exxon has paid 33 percent in other years

Exxon Mobil Vice President of Investor Relations Jeffrey Woodbury said in October what the company would do with additional cash: "The first things that are being funded are our dividends and our investment program.


Vague promise to help shareholders and employees.

34 percent tax rate

Costco CFO Richard Galanti said earlier this month: "I dont think were going to sit around the table and say, weve got this big bucket of money, what can we do that we werent prepared to do yesterderday...I think youll see us do what we do well, its merchandising and driving business and taking care of our employees and ultimately taking care of our shareholders."


Vague pledge to add more jobs and give more to shareholders.

33 percent tax rate

Kroger CEO W. Rodney McMullen said in November: "Were very excited about where the tax reform is headed. We believe it will also influence for us to continue to invest in our business, which will grow jobs. And I think what will end up happening is youll see us doing a balance of everything together. Some of it our shareholders will benefit from, some of it our associates will benefit from, and our customers will benefit from it as well."


Plans for higher dividends and more investment.

The tax rate varies a lot from year to year, but has tended to be around 39 percent.

Chevron CEO John Watson said in March: "I strongly support tax reform. We typically have tax rates higher than the U.S. statutory rate, so we dont keep money offshore. Its really a decision for us of where we can profitably reinvest the dollars that well be generating out of Australia as well as think about giving some of it back to shareholders in the form of higher dividends."


No specific plans.

30 percent tax rate

Walmart CEO Doug McMillon said in November: "We havent done a lot of detailed planning on it yet, but I do think somethings going to happen and Im optimistic that a lower tax rate for individuals as well as for business will help spur the economy and drive more growth.


No specific plans, although company generally plans to invest more and look for mergers and acquisitions.

33 percent tax rate

General Motors

No specific plans.

21 percent tax rate

General Motors CEO Mary Barra said earlier this month: "Were very supportive of tax reform, and generally the bills before Congress move in the right direction."


No specific plans, although company has been looking for M&A opportunities.

24 percent tax rate

McKesson has not commented directly on the tax bill, but CEO John Hammergren said in October: "We do prefer M&A [mergers and acquisitions]. But as you know, we do this in a portfolio way. Were not afraid to do share repurchases."


No specific plans. Company is watching health care reform.

40 percent tax rate

UnitedHealth has not commented directly on the tax bill, but CEO David Wichmann said in October: "I would like to just underscore that our capital deployment philosophies will be consistent with what youve seen in the past.


No specific plans.

32 percent tax rate

Ford senior economist Bryan Bezold said earlier this month: "I would say its too early to tell on [taxes]."


No specific plans.

37.5 percent tax rate
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Title Annotation:Business wire_
Publication:Daily Herald (Arlington Heights, IL)
Date:Dec 21, 2017
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