President Donald Trump says the recently passed tax cuts are already showing up in the paychecks of millions of workers.
“4.2 million hard working Americans have already received a large Bonus and/or Pay Increase because of our recently Passed Tax Cut & Jobs Bill….and it will only get better! We are far ahead of schedule,” he tweeted Sunday.
The Trump administration made a similar claim last month, citing several companies that passed tax benefits on to their workers, including American Airlines, which handed out $1,000 bonuses to employees at a total cost of almost $130 million, as well as Disney and AT&T. (The Trump administration is suing to block AT&T’s acquisition of Time Warner, which owns CNN.)
But they represent a small fraction of the billions of dollars that companies will save because of a sharp cut in their tax rates.
Wall Street analysts expect that public companies will spend a much bigger share of that cash buying back their own stock and increasing shareholder dividends. That’s a big reason the stock market has taken off.
Also, with unemployment at a historically low 4.1%, many companies are having trouble hiring. The job market is so tight that many companies increasingly will be forced to raise pay and offer better benefits to entice job candidates and keep current workers from leaving.
The benefits from the tax cuts have been debated. House Speaker Paul Ryan deleted a tweet in early February touting the GOP tax overhaul after critics called him out for appearing out-of-touch with the reality of low-income individuals’ financial situations.
The tweet shared the story of a secretary who, according to a report by the Associated Press, was “pleasantly surprised her pay went up $1.50 a week.”
“A secretary at a public high school in Lancaster, PA, said she was pleasantly surprised her pay went up $1.50 a week … she said [that] will more than cover her Costco membership for the year,” Ryan tweeted with a link to the full article.
Prominent Democrats noted on social media that $1.50 per week is not a significant pay bump.
“Paul Ryan deleted his embarrassing tweet of a blatant admission because he and Republicans don’t want you to know the truth: the #GOPTaxScam is a gift to corporate America and the top 1% at your expense,” House Minority Leader Nancy Pelosi tweeted. “He also doesn’t want you to know he got $500.000.00 from the Koch family.”
CNN’s Sophie Tatum, Julia Horowitz and Tami Luhby contributed to this report.