CHARLOTTE – Charlotte Pipe and Foundry joined the growing list of companies to deliver pay bonuses to their employees after the Republican-led tax cut dropped corporate and individual income taxes for most Americans. Charlotte Pipe will give all associates $1,000 each on March 15.
“We are excited to share the benefits of our associates’ diligent efforts, loyalty, and dedication to Charlotte Pipe, and the benefits that will accrue from The Tax Cuts and Jobs Act,” said Roddy Dowd, Jr., CEO of Charlotte Pipe and Foundry. The company is based in Charlotte with seven plants across the U.S. making cast iron and plastic pipe fittings. The majority of their 1,400 employees are in North Carolina.
More than 130 other large and small companies across the country have committed bonus pay for two million employees after the new law cut the corporate rate to 21 percent from 35 percent. Some of the other companies include Walmart, Southwest Airlines, American Airlines Group Inc, Comcast, JetBlue, AT&T, U.S. Bank, Nationwide Insurance, AT&T Inc, Fiat/Chrysler, Old Dominion Freight Line, Wells Fargo, and Bank of America, also based in Charlotte.
The tax cuts and bonus announcements came just after holiday spending jumped 5.5 percent – its biggest gain since 2005. Sales in November and December rose to $691.9 billion, compared with $655.8 billion the previous year, excluding sales at restaurants, automobile dealers and gasoline stations, the National Retail Federation said.
NRF Chief Economist Jack Kleinhenz said a number of factors contributed to surging economic confidence including a pickup in income, a rising stock market, unemployment levels at 17-year lows and the timing of the tax cuts.
“When that got passed and companies started to announce bonuses and wage increases, the consumer felt very much more at ease going into the holiday season and spending,” Kleinhenz said in an interview.
The nation’s largest retailer, Walmart, announced a minimum pay hike to eleven dollars, a one-time cash bonus based on length of service, and expanded maternity and parental leave benefits. However, Walmart also took heat because it is closing ten percent of their Sam’s Club locations, two in N.C. The company said that the closures are part of an increasing focus on online sales and a dozen of the locations will be converted to fulfillment centers.
Senate Democrats, none of whom voted for the tax cut, are still critical of the changes, saying they benefit the wealthy and add to the federal deficit. Senate Minority Leader Nancy Pelosi called the employee bonuses “crumbs.”
However, employers say that the bonuses are likely just the beginning.
“Our corporate tax rate, which has been the highest of any country in the developed world, will now be on par with the average tax rate of these same countries,” said Dowd. “Investments in new machinery and equipment will be more attractive, and opportunities to expand our business should increase.”
The changes to tax brackets took effect on January 1st, while changes to withholdings in paychecks will begin as early as February. The doubling of the standard deduction will be in effect for 2018 taxes filed in April 2019.