Hundreds, possibly thousands of companies are paying bonuses (usually $1.000) to their employees as a result of the GOP tax reform package. Clearly, these actions are bringing kudos to these firms both from the Trump administration and the public at large. However, there is another win here ... and that is that this additional expense is a one-time charge for these companies. It seems unlikely that all will give out such largess next year like they would have if they had increased employee salaries.
One real test of the effectiveness of our new tax law will be how employee compensation finally grows over the next few reporting periods ... the biggest potential win. Watch for it ...
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