December 26, 2017
CEOs are getting a big tax cut for their businesses, courtesy of the new tax bill—but that doesn’t mean they’ll use the savings to create American jobs, based on results of a survey conducted at the Yale School of Management’s Chief Executive Leadership Institute (CELI) and released on December 18.
Indeed, just 14% of the respondents at the 92nd Yale CEO Summit said their companies plan to make large, immediate capital investments in the United States now that the tax overhaul has been signed into law. Such capital investments in infrastructure and upgrades can lead to hiring.
Only a slim majority of the CEOs, 55%, approved of the Republican tax plan. A full 72% or respondents said they believe that it is “wrong” for the package to sizeably increase the national debt.
What’s more, 62% are concerned that the tax proposal will negatively impact the nation’s healthcare system, Yale said.
The findings, along with other surveys, suggest that the tax plan may not have the dramatic impact on jobs that President Donald Trump and Republicans in Congress have promised.
Trump tweeted over the weekend that “TAX CUTS” will lead to “higher growth, higher wages, and more JOBS!” The GOP tax overhaul will slash the corporate tax rate from 35% to 21% and offer incentives for companies to bring foreign profits back home.
Jeffrey Sonnenfeld, who leads the Yale CEO Summit, said in an interview reported on by ABC-TV news affiliate Newscenter 25 in Victoria, Texas, that it is “astounding” how few companies plan to reinvest their tax savings.
He called the idea of a jobs boom from the tax plan “a lot of smoke and mirrors,” especially because the unemployment rate is just 4.1% and companies already have plenty of cash to make investments.
Sonnenfeld declined to name the CEOs who participated in the poll. He said it included “Trump supporters” and former members of the president’s now-defunct advisory councils of business leaders.
Research contact: AHudspeth@morganmurphymedia.com