US aerospace giant Boeing has applauded the Trump administration’s corporate tax cuts, saying they will help the company better compete against its global rivals.
The rewrite of the US tax laws, which has been criticised as favouring corporations and the rich at the expense of middle America, bring the US corporate tax rate down from 35 per cent to 21per cent.
They $US1.5 trillion package was passed in the Senate on party lines in a 51-48 victory for Republicans and important legislative win for President Trump in a year in which his ambitions have been largely frustrated.
Yet polls show the tax cuts are unpopular with voters: a Quinnipac University survey released December 13 showed 55 percent of respondents disapproved of the plan compared with 26 per cent who supported it.
Only 16 per cent of voters said the plan would reduce their taxes, while 44 per cent expected an increase and a 30 per cent predicted it would have little impact.
Not surprisingly the view is different in the corporate world, where Boeing has been a among a number of US companies to enthusiastically embrace the cuts.
Boeing chief executive Dennis Muilenburg praised the tax bill, describing it as a “a critical driver of business, economic growth and innovation for the United States and for Boeing.”
“On behalf of all of our stakeholders, we applaud and thank Congress and the administration for their leadership in seizing this opportunity to unleash economic energy in the United States,” Muilenburg said in a statement released shortly after the vote. “It’s the single-most important thing we can do to drive innovation, support quality jobs and accelerate capital investment in our country.”
The Chicago-based aerospace company believes it will benefit from a simpler tax code and lower tax rate that are closer to those enjoyed by its global competition.
“For Boeing, the reforms enable us to better compete on the world stage and give us a stronger foundation for the investment in innovation, facilities and skills that will support our long-term growth,” Muilenburg said.
The Boeing boss linked $US300 million in additional investments to the new tax law, including $US100 million for charitable causes and similar amount to be invested in workforce development.
A further $100 million is earmarked for “workplace of the future” facilities and infrastructure for Boeing employees.
The investments reflected the “real-time impact and economic benefit of the reforms,” Muilenburg said.
Boeing isn’t the only big company to back the changes by announcing an additional investment.
Communications company AT&T announced it would give more than 200,000 employees bonuses of $US1000 in response to the tax bill, saying the reforms “were a monumental step to bring taxes paid by US businesses in line with the rest of the industrialized world’’.
It plans to invest an additional $US1 billion in US operations in 2018, a move it says will create 7000 jobs.
But several economists say they expect the tax cuts to have a more modest impact on workers and the economy than that claimed by the White House.
Moody’s analytics chief economist Mark Zandi told USA Today he expected economic growth from the tax cuts over 10 years to be just 0.5 percent and not the 3-5 percent touted by the Administration.