This is one company. There are billions of dollars of pent up projects that businesses would do if they had more capital.
If tax reform passes, AT&T (T) CEO Randall Stephenson said the company will spend “at least” $1 billion in capital expenditure and be able to create an estimated 7,000 jobs.
“From my standpoint, the driver of this is the business tax reform… if we get investment going, we get productivity going, we get wage gain going, we invest another billion dollars. Every billion dollars AT&T invests is 7,000 hard hat jobs. These are not entry-level jobs. These are 7,000 jobs of people putting fiber in ground, hard hat jobs that make $70,000 to $80,000 per year,” Stephenson said at an event hosted by The Economic Club of New York on Wednesday.
He described passing tax reform as a “major” and “significant” item for the U.S. economy.
“I cannot overstate how important I think a tax bill that makes the US corporate taxes a competitive regime around the world — that’s big. That’s significant,” he said.
He explained that it would be a “capital-freeing” event for corporate America.
“You are freed up to invest more capital. We have so many initiatives and projects that we would like to invest more in.”
HAHAHAHAHAHAHA. If you believe the CEO of a major telecom, I have a bridge to sell you. Is this billion dollars over the next 3 years? 5 years? 20 years? Because that is a big deal for a company that made just shy of 4 BILLION dollars last year.
If there is money to be made, they will invest regardless of the current tax bill, they don’t seem to be hurting. The telecoms are one of the least trusted sectors, and there are plenty of examples of broken promises from them for years and years.
After digging a little deeper, I see that he did say 1 Billion next year. Of course if we lowered their tax rate, they would be looking to pay about 3 billion LESS in taxes. So… net loss for the US.
That depends on how you define “the US.” If you define it as the government, then perhaps you are right (depending on growth). If you define it as “the people,” then no. That money has to go somewhere, so what is not invested in capital projects will likely be distributed to shareholders, spent on new ventures, spent on existing employees, or any number of things. Or maybe they just stick it in the bank and other companies use it as capital. Or some combination of a hundred different things. Whatever the case, I’d rather see more money spent by millions of individual Americans on their priorities than by 536 politicians in Washington.
In 2016, AT&T’s pre-tax net income was $19.8 billion and it paid $6.48 billion in tax (equating to a rate of 32.7 percent). If AT&T had paid only 20 percent in taxes last year instead of around 32, it would have paid about $4 billion, or about $2.5 billion less than it did.