Following the passage of the American Tax Cuts and Jobs Act, a number of companies announced that in celebration, they’d be giving their employees an extra $1,000 bonus. AT&T was the first to announce, and countless others quickly followed.
Contrary to popular belief, it wasn’t just multi-billion dollar corporations shilling out some extra cash to their employees. Large companies just dominated the media headlines. After all, “Verizon Gives $1,000 Bonus To Employees” will certainly get a lot more attention than, say, “Mike’s Repair Shop Gives Raise.” Among the small-cap firms giving bonuses was Turning Point Brands, a manufacturer of “alternative” (smokeless, vaping) tobacco products with 107 employees that mirrored the $1,000 raise.
Their CEO specifically thanked tax reform when announcing the raise. “We especially want to thank President Trump, Senate Majority Leader Mitch McConnell, and House Speaker Paul Ryan for pushing to get tax reform done this year, which allowed our people to immediately feel the impact. Every leader who pushed for and voted for tax reform made these bonuses possible.”
But what about you, the consumer? When scrolling through my social media feeds and seeing these stories, it was common to see many complaining that this doesn’t benefit them. “Sure it’s great for AT&T workers who got a raise, but what about my cell phone bill that keeps going up?” seemed to be the gist of the comments (adjusted for the specific company making headlines).
As it turns out, some of the tax savings are being passed onto the consumer. According to the Washington Examiner, “on the heels of companies dishing bonuses of up to $3,000 to over one million workers due to the anticipated benefit of President Trump’s tax reform victory, several major utilities have announced plans to cut rates in a consumer payback related to the lower taxes.”
Here are just a few examples:
- Baltimore Gas & Electric – the utility is passing on $82 million worth of tax savings, resulting in lower gas and electric bills for customers.
- Pacific Power – “We strive to provide our customers reliable service while keeping rates low,” said Stefan Bird, President and CEO of Pacific Power. “The benefit of this tax cut should be passed on to our customers – and we will work with our regulators and stakeholders on the best way to do that.”
- Pepco – Pepco today announced they will file with the Public Service Commission of the District of Columbia in early February, outlining plans to provide annual tax savings to more than 296,000 electric customers in the District of Columbia. If approved, Pepco would plan to begin providing a credit lowering customer bills starting in the first quarter of 2018.
- Rocky Mountain Power – RM Power says it plans to pass some of its federal tax savings on to customers. But, the company isn’t sure how much or when.
- Commonwealth Edison Company (ComEd) – the utility is passing on $200 million worth of tax savings to its customers: ComEd is filed a petition with the Illinois Commerce Commission (ICC) seeking approval to pass along approximately $200 million in tax savings to its customers in 2018. If approved by the ICC, the average ComEd residential customer can expect to see an estimated $2-$3 decrease on their monthly bill related to the tax reduction.
If the response to the news of companies raising wages was any indication, this should place pressure on other utilities to follow suit.
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