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AT&T to pay $1,000 bonus due to tax cuts AT&T to pay $1,000 bonus due to tax cuts
(35 minutes later)
Telecoms giant AT&T has said it will pay a $1,000 (£747) bonus to more than 200,000 workers, as a result of the US tax reform bill being cleared.Telecoms giant AT&T has said it will pay a $1,000 (£747) bonus to more than 200,000 workers, as a result of the US tax reform bill being cleared.
The firm, which still needs government approval to allow it to take over Time-Warner, also said it would invest an additional $1bn in the US in 2018.The firm, which still needs government approval to allow it to take over Time-Warner, also said it would invest an additional $1bn in the US in 2018.
US President Donald Trump referred to AT&T's move in a speech celebrating the cuts, which were a key priority.US President Donald Trump referred to AT&T's move in a speech celebrating the cuts, which were a key priority.
He has said the cuts will lead to higher wages and more economic growth. He has said the cuts will lead to higher wages and more US investment.
The announcement by AT&T provides the president with ammunition to support those claims, which are contested by economists, among others. Other companies joined AT&T's announcement, providing the president with ammunition to support his claims, which are contested.
Boeing has also said it will invest an additional $300m. Comcast said it would invest more than $50bn in infrastructure over five years and award $1,000 bonuses to more than 100,000 workers, while Boeing announced plans to invest an additional $300m.
But many expect companies to put much of the money saved on taxes into share buybacks and dividends. Already, some companies have announced such plans. Many expect companies to put much of the money saved on taxes into share buybacks and dividends. Already, some companies have announced such plans.
Democratic Senator Chuck Schumer called AT&T's announcement "the exception, not the rule".Democratic Senator Chuck Schumer called AT&T's announcement "the exception, not the rule".
'Monumental step''Monumental step'
In his statement, AT&T chief executive Randall Stephenson called the new tax plan a "monumental step".In his statement, AT&T chief executive Randall Stephenson called the new tax plan a "monumental step".
"This tax reform will drive economic growth and create good-paying jobs," he said."This tax reform will drive economic growth and create good-paying jobs," he said.
"In fact, we will increase our US investment and pay a special bonus to our US employees.""In fact, we will increase our US investment and pay a special bonus to our US employees."
AT&T, the second largest wireless company in the US, paid about $6.5bn in taxes at an effective rate of about 33% in 2016, according to federal filings.AT&T, the second largest wireless company in the US, paid about $6.5bn in taxes at an effective rate of about 33% in 2016, according to federal filings.
Under the new plan, the top corporate tax rate in the US will fall from 35% to 21%.Under the new plan, the top corporate tax rate in the US will fall from 35% to 21%.
The bonus award is expected to cost the firm about $230m and go to non-manager, unionised employees.The bonus award is expected to cost the firm about $230m and go to non-manager, unionised employees.
The firm had previously said it would invest $1bn more if tax reform was approved.The firm had previously said it would invest $1bn more if tax reform was approved.
The moves come as AT&T gears up for a fight with the federal government.The moves come as AT&T gears up for a fight with the federal government.
Last month, the US Department of Justice filed a lawsuit to block AT&T's merger with Time Warner, saying it would reduce competition and raise consumer prices.Last month, the US Department of Justice filed a lawsuit to block AT&T's merger with Time Warner, saying it would reduce competition and raise consumer prices.