Many Nebraskan workers, and Americans as a whole, may be in for a nice surprise this year. After benefiting from the largest tax reform in decades, many businesses across the nation are passing on some of their new-found wealth to their employees, and most Americans (and some current students even) will be effected in some way by this change.
One of the more attention-grabbing and publicity-boosting actions that some companies have taken was handing out huge bonuses to much of their workforce, with firms such as Home Depot and Walmart passing out one time gifts of up to $1000 (though some may get less depending on time with the company). In addition, many employees are going to be seeing their pay go up, such as Walmart employees’ pay going up to $11 an hour.
The reason for these corporations’ sudden generosity is due to the new law lowering the corporate tax rate from 35% (one of the highest in the world) to 21%. Seen by some lawmakers as way to boost growth in the economy, the bill is already having numerous effects, many of which are seen by most executives as a net positive for their company. As a half publicity stunt and half generous gesture, companies are now passing some of their savings off to their workers.
In addition, the new bill is supposed to give incentives to companies to move their massive mountains of cash back into the US. Due to loopholes exploited by companies such as Apple, Boeing and Google, money generated by these companies can avoid parts of their large tax bills by essentially parking it in other countries, such as Ireland. The hope is that that money will soon be coming home and end up in worker’s pockets.
While this news is great, especially if you work for or plan to work for one of the companies mentioned, there are potentially some significant downsides. This year alone, the government will have to borrow billions more than they normally would, essentially meaning cutbacks in other social programs may be on the table. In addition, many of the tax cuts for average Americans will be phased out before 2030.
The hope of many is that the economic benefits of the change will outweigh the obvious downsides. The powers that be today are making decisions that will affect Union students tomorrow, and whether or not these consequences are good or bad are yet to be seen. The next chance we get to change it may take another 30 years.
Jesse Shoghi is a junior studying communications.