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The Tax Reform wheel spins for walmart
Topic Started: Jan 11 2018, 05:18 AM (652 Views)
George K
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Finally
Davis
Jan 12 2018, 05:27 AM
Typically planning for salary changes takes time, easier to give a bonus.
There you go: Salary≠Bonus

Bonus:
Quote:
 
noun, plural bonuses.

1. something given or paid over and above what is due.
2. a sum of money granted or given to an employee, a returned soldier, etc., in addition to regular pay, usually in appreciation for work done, length of service, accumulated favors, etc.
3. something free, as an extra dividend, given by a corporation to a purchaser of its securities.
4. a premium paid for a loan, contract, etc.
5. something extra or additional given freely: Every purchaser of a pound of coffee received a box of cookies as a bonus.
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John Galt
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George K
Jan 12 2018, 05:20 AM
Fiat Chrysler announced Thursday that it will up its investment in the United States and pay some of its employees special bonuses after the recent tax code overhaul.

CEO Sergio Marchionne said in a statement that these announcements reflect the company's ongoing commitment to manufacturing in the U.S. He also cited the recently signed tax bill as an opportunity to share the savings with Fiat Chrysler employees.

The automaker said it will invest more than $1 billion in a Michigan plant and relocate production of its Ram Heavy Duty truck in 2020. That model is currently being produced in Saltillo, Mexico.



The $1 billion expansion is very old news.

From March 2017:

Quote:
 
On Sunday, FCA US, the parent company of Fiat and Chrysler, announced that it will spend $1 billion to expand plants in Michigan and Ohio and create 2,000 more jobs in the U.S. The move, as the company made clear in its press release, is simply the next phase in an expansion plan it announced last year and comes on top of billions of previous investments that created thousands of jobs.

“This plan was in the works back in 2015,” Jodi Tinson, a spokeswoman for FCA, told ThinkProgress. “This announcement…was just final confirmation.”

When asked directly if it was true that politics and the election had no influence on the announcement, she said, “Correct.”
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George K
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John Galt
Jan 12 2018, 06:45 AM
The $1 billion expansion is very old news.

From March 2017:

Well, it's 10-month-old news, at the least.

Were the bonuses part of that announcement?
Edited by George K, Jan 12 2018, 06:55 AM.
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John Galt
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George K
Jan 12 2018, 06:55 AM
John Galt
Jan 12 2018, 06:45 AM
The $1 billion expansion is very old news.

From March 2017:

1) Well, it's 10-month-old news, at the least.

2) Were the bonuses part of that announcement?
1) Older than that.

Quote:
 
"This plan was in the works back in 2015," Jodi Tinson, a spokeswoman for FCA, told ThinkProgress. "This announcement ....was just final confirmation.


2) I didn't see it mentioned in Their business plan update from 2016. But this was:

Quote:
 
FCA US announced a year ago [2016] in an investor presentation that it was experiencing what it saw as a permanent shift among U.S. consumers from cars to SUVs and trucks, and that there was therefore unmet demand for larger vehicles than the Wrangler and Grand Cherokee. It committed to expanding faster in the U.S. and to “[realigning] installed capacity to produce more pickups and Jeeps by end of 2017 to match shift in demand.” It said it would get to that goal within its existing plant infrastructure and potentially increase its headcount.

The company started following through in July of last year. It announced at that time that it would invest more than $1 billion in plants in Illinois and Ohio, adding new 1,000 jobs; and $1.5 billion in a Michigan plant, adding 700 jobs.

Monday’s announcement, therefore, is the second phase in this process and a confirmation of these ongoing plans ,“[c]onsistent and combined with previously announced investments,” as the company put it. The company says it has already invested more than $9.6 billion in U.S. facilities and created 25,000 new American jobs since 2009.


So maybe we can agree that 1) FCA was expanding its operations well before Trump was even a glimmer in anyone's eye and 2) the bonuses are a result of the tax changes?
Edited by John Galt, Jan 12 2018, 07:13 AM.
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George K
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John Galt
Jan 12 2018, 07:12 AM
So maybe we can agree that 1) FCA was expanding its operations well before Trump was even a glimmer in anyone's eye and 2) the bonuses are a result of the tax changes?
Yes, and the second part was the point of my post.
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John Galt
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Yes, I know.

As jon pointed out, I'm a cynic as far as these bonuses are concerned. These companies are going to be ahead of the game after they pay the bonuses and their tax liability has gone down. I think it's the cost of doing business/PR/suck up to Trump stunt that will not be repeated.

The elephant in the room is the deficit. And what will happen to the average taxpayer down the road when the tax changes expire for us.
Edited by John Galt, Jan 12 2018, 07:25 AM.
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George K
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John Galt
Jan 12 2018, 07:24 AM
As jon pointed out, I'm a cynic as far as these bonuses are concerned.
Are they a one-of? Probably so. However, coupled with the average tax decrease for Joe Six-Pack, it's probably a nice thing. I even remember being lectured told that $40 savings on each paycheck was significant. Please note, I'm not defending this tax bill here, simply pointing out that for a lot of individuals, it's a nice thing, even if temporary.
Quote:
 
The elephant in the room is the deficit
The debt is a huge problem. However, this new-found concern about it, when trillions were flushed down the stimulus rat-hole, seems opportunistic. That's not to say that I'm not concerned, however. My kids and grandkids are going to have to reckon with it. There's no question that to fix it it's going to hurt - a lot. Entitlements are going to have to change. Taxes are going to have to as well.
Quote:
 
what will happen to the average taxpayer down the road when the tax changes expire for us.
My understanding is that the sunsetting of the tax changes was required by the Byrd Rule for getting an economic bill through reconciliation (no debt increase after 10 years). That's why Jon used to call it the "Bush Tax Hike" way back when.
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John Galt
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Thanks for your further thoughts, George.

I want to pass along a couple of articles that I recently read that you might find interesting; kind of related to the stuff that's been talked about in this thread.


The first talks about the impact of the tax bill in ways beyond the sunsetting of the rates:

https://theconversation.com/two-little-known-ways-gop-tax-bill-would-make-chasm-between-rich-and-poor-even-wider-88515



A second talks about the future of FCA, and the possibility of Chinese involvement:

https://www.freep.com/story/money/cars/chrysler/2018/01/13/fiat-chrysler-future/1030284001/




The last one discusses what's going on in the broader automotive industry, including job creation/loss in recent years and more detail on what those numbers actually reflect.

https://www.freep.com/story/money/cars/2018/01/12/trump-gm-ford-fiat-chrysler-jobs/1018786001/


And you thought you didn't have anything to read this afternoon.... :lol2:

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George K
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https://www.cnbc.com/2018/01/17/apple-announces-350-billion-investment-20k-jobs-over-5-years.html
Quote:
 
Wednesday made a slew of announcements about its investment in and contribution to the U.S. economy in part because of the new tax law.

The headline from Apple is that it will make a $350 billion "contribution" to the U.S. economy over the next five years, although it's unclear exactly how the company came to that number.

The company also promised to create 20,000 new jobs and open a new campus.

It said it expects to pay about $38 billion in taxes for the horde of cash it plans to bring back to the United States. This implies it will repatriate virtually all of its $250 billion in overseas cash.

Apple also said it will spend over $30 billion in capital expenditures over the next five years. About $10 billion in capital expenditures will be investments in U.S. data centers, the company said.

Apple added that it will spend $5 billion as part of an innovation fund, up from the $1 billion CEO Tim Cook announced last year on CNBC's "Mad Money."

The job creation will include direct employment and also suppliers and its app business, which it had already planned to grow substantially (app developers earned $26.5 billion in 2017.) The new campus will focus on customer support.

Wednesday's announcement indicates that Apple will still have hundreds of billions of dollars in cash. It could spend that money on buybacks, dividends or acquisitions or moonshot projects.
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xenon
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Great news - I don't know what Apple was planning on spending in the absence of tax reform (I'm going to assume the incremental spend is substantial).

But yeah - great news. I've always been a fan of shifting tax burden away from corporations to individuals.

The U.S. is actually very competitive when it comes to high end, capital intensive manufacturing.
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Luke's Dad
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Emperor Pengin
This is the big question about the corporate rmtax break... How many dollars are overseas that will be repatriated? That's the show to watch, right now.
The problem with having an open mind is that people keep trying to put things in it.
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George K
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John Galt
 
Will be interesting to see if bonuses are just a 2018 phenomenon and quietly disappear after that, while the corporations continue to enjoy their reduced tax burden into the future..
Bonus vs Raise: https://www.washingtonpost.com/news/on-leadership/wp/2018/01/18/why-many-companies-are-giving-bonuses-not-raises-after-the-new-tax-cuts/?utm_term=.80063237798d

Quote:
 
"The one-time bonus is an easy thing to do: It generates good will, puts money into employees' pockets, and you're not committed long-term to anything," said Gregg Levinson, a senior retirement consultant at Willis Towers Watson.

"Salaries represent the single largest percentage of direct labor costs" for employers, said Ken Abosch, the North American compensation practice leader for Aon. "Any time you give someone an increase in their salary, it’s an annuity. It's not a one-time event like a bonus. It’s additive and it compounds."

It also reflects a long-term trend in how compensation for rank-and-file employees has been paid: For more than two decades, employers have increasingly allocated more of their payroll budgets to discretionary bonuses and less and less to paying increases in salaries. In 1992, said Abosch, spending on "variable pay" was just 5.7 percent of employers' payroll budgets, and salary increases were 4.6 percent. Today, those numbers are 12.7 percent and just 2.9 percent, respectively.

Meanwhile, the speedy announcements about one-time bonuses that have come out in recent weeks give companies a chance to get good P.R. and foster worker goodwill even while many are more careful about base pay increases, said Andrew Chamberlain, the chief economist at the careers site Glassdoor.

"The way it’s supposed to work is that companies get a tax cut, they invest more, they expand their operations, and that investment makes workers more productive per hour. That raises wages," he said. "The fact that these bonuses are coming out surely has mixed motives -- it's partly the P.R. benefit, partly trying to get on the bandwagon because the tax bill has been in the news, and partly playing follow the leader" with other companies in their industries.

Indeed, many of the companies that have announced bonuses or base pay increases fall into similar industries, such as airlines and banks, which compete for workers. Chamberlain said more base salary bumps could come over time, but "that’s not going to happen overnight."

Even if employers do make investments that lead to pay raises -- rather than merely returning the money to shareholders in the form of dividends or buybacks, as some CEOs have said they'll do -- employers may still be cautious. "We might see a contraction in the economy, we might see a whole new political environment that wipes this out," Levinson said. "A one-time bonus that hits the books now and a more cautious approach going forward is what most companies will do, I think."
Edited by George K, Jan 19 2018, 06:32 PM.
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George K
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John Galt
Jan 11 2018, 06:26 AM
Will be interesting to see if bonuses are just a 2018 phenomenon and quietly disappear after that, while the corporations continue to enjoy their reduced tax burden into the future.
I know, I posted a similar story in the other thread.

But, just to address the question:

https://www.ft.com/content/e64b15a2-0036-11e8-9650-9c0ad2d7c5b5
Quote:
 
JP Morgan Chase will increase wages for its lowest-paid workers and reverse its recent trend of branch closures, it announced on Tuesday, after promising to share the proceeds of the Trump administration’s recent tax cuts.

The moves are part of an investment plan which the bank says will be worth $20bn over the next five years, including further commitments to increase its lending to small businesses and create thousands of new jobs.

Wages for 22,000 of JPMorgan’s hourly workers will increase from between $12/hour and $16.50/hour to between $15/hour and $18/hour, depending on the local cost of living. The rises will come into force from February 25, with staff gaining an average wage rise of 10 percent.
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"Now look here, you Baltic gas passer... "
- Mik, 6/14/08


Nothing is as effective as homeopathy.

I'd rather listen to an hour of Abba than an hour of The Beatles.
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George K
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Starbucks

Quote:
 
Starbucks is giving its U.S. workers pay raises and stock grants this year, citing recent changes to the tax law.

All employees will soon be able to earn paid sick time off, and the company’s parental leave benefits will include all non-birth parents. Starbucks Corp. said Wednesday that the changes affect about 150,000 full-time, part-time, hourly and salaried employees, most of whom work as baristas or shop managers. The new benefits apply to workers at more than 8,200 company-owned stores but not at the 5,700 licensed shops like those found inside supermarkets.

Starbucks is the latest to say it’s boosting pay or benefits due to the passage of the Republican tax plan, which slashed the corporate tax rate from 35 percent to 21 percent. Walmart, for example, raised its starting hourly salary from $9 to $11 earlier this month, and also expanded its parental leave benefits.

Beyond changes to the tax law, other factors are affecting retail working conditions. Larger employers are having a hard time attracting and keeping workers because of historically low unemployment rates. Job seekers can be pickier about where they work, and companies are trying to make themselves more attractive. Target had also announced in October that it would raise its starting hourly wage to $11, and said it would raise wages to $15 by the end of 2020.
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Nothing is as effective as homeopathy.

I'd rather listen to an hour of Abba than an hour of The Beatles.
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Copper
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It is going to take all of cnn's cleverness to write headlines when president Elizabeth Warren reverses all this and sends the money back overseas.

The Confederate soldier was peculiar in that he was ever ready to fight, but never ready to submit to the routine duty and discipline of the camp or the march. The soldiers were determined to be soldiers after their own notions, and do their duty, for the love of it, as they thought best. Carlton McCarthy
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Axtremus
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HOLY CARP!!!
#taxcutmetoo
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Davis
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#butwaittheresmore
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Davis
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Could you imagine if Oprah could say and you get a raise and you get a raise :lol2:
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George K
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Home Depot
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Aqua Letifer
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ZOOOOOM!
Be much cooler if they gave a raise.
I cite irreconcilable differences.
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George K
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Aqua Letifer
Jan 26 2018, 06:41 AM
Be much cooler if they gave a raise.
Like Walmart, JP Morgan Chase, and Starbucks did.
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I'd rather listen to an hour of Abba than an hour of The Beatles.
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John Galt
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Walmart loses points for closing all those Sam's Clubs, though..... :lol2:
Edited by John Galt, Jan 26 2018, 06:50 AM.
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Improviso
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HOLY CARP!!!
John Galt
Jan 26 2018, 06:50 AM
Walmart loses points for closing all those Sam's Clubs, though..... :lol2:
Quote:
 
According to Business Insider, ten of the shuttered stores will become e-commerce distribution centers.

Why? Because Walmart is gearing up to compete with Amazon. It's part of their evolving business plan.

But jeez... let's not tell the whole story.
Identifying narcissists isn't difficult. Just look for the person who is constantly fishing for compliments
and admiration while breaking down over even the slightest bit of criticism.

We have the freedom to choose our actions, but we do not get to choose our consequences.
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Improviso
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HOLY CARP!!!
Quote:
 
Sam's Club CEO John Furner notified employees of the closures in a company-wide email sent Thursday.

"After a thorough review, it became clear we had built clubs in some locations that impacted other clubs, and where population had not grown as anticipated," he said. "We will be closing some clubs, and we notified them today. We’ll convert some of them into eCommerce fulfillment centers - to better serve the growing number of members shopping with us online and continue scaling the SamsClub.com business."
Identifying narcissists isn't difficult. Just look for the person who is constantly fishing for compliments
and admiration while breaking down over even the slightest bit of criticism.

We have the freedom to choose our actions, but we do not get to choose our consequences.
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Aqua Letifer
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ZOOOOOM!
George K
Jan 26 2018, 06:45 AM
Aqua Letifer
Jan 26 2018, 06:41 AM
Be much cooler if they gave a raise.
Like Walmart, JP Morgan Chase, and Starbucks did.
Yeah.
I cite irreconcilable differences.
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