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Apr 02, 2018

The reaction of companies to the recent tax cuts in America

When the news first broke out, it was welcomed by both the big and small companies. Everyone was happy about the tax reforms, which meant tax cuts for companies. And this also meant there would be more money for companies to fund their operations and pay higher salaries to the employees. But after the calculations have been made there have been some mixed reactions to the new tax cut reforms.

While some companies have welcomed the new development, other companies have announced the payment increments in employee bonuses, while laying off thousands of other employees. This trend has been reported in many big corporations. This is against the proposals which led to these tax cuts that it was a way to increase the funds available to companies which could be used to carry out their expansion plans.

The massive job losses have been explained as a consequence of the restructuring operation within these organizations, which could not be possible without letting some employees go. This is unfortunate. But we understand that the new funds that will be realized have to be carefully managed, and the benefits might not be apparent in the operations of the organization for many years.

Another issue is that now companies have more funds at their disposal, will the employees be given an opportunity to renegotiate their terms and wages? This is still a question that is yet to be answered, however; many companies have made public the increments that have been approved for their employees. The economy should also witness a significant appreciation due to these tax cuts as many companies have increased their overall capital expenses to promote business operations.

The tax reforms have been anticipated for a long time, now that it has happened, it is crucial that the employees and the economy should be the focus, rather than one-sided decisions to increase profits.

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