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After Opposing Trump, Companies Like Starbucks (Kind Of) Thank Him For Tax Cuts

Trump was quick to take credit after companies started doling out bonuses, but after getting a huge tax break, they’re essentially engaging in good PR.

After Opposing Trump, Companies Like Starbucks (Kind Of) Thank Him For Tax Cuts
[Photo: madison bilsborough/Unsplash]

Back when Donald Trump was still campaigning for president, Starbucks—then helmed by Howard Schultz—was one of the most vocal critics of the Republican candidate’s divisive rhetoric. In keeping with its ethos of social responsibility, Starbucks took tangible steps to combat Trump’s proposed policies and it continued to oppose those policies once Trump won. A year ago, for instance, Starbucks vowed to hire 10,000 refugees in response to the president’s proposed immigration ban. Starbucks also doubled down on its investment in Mexico, which included a donation of 4 million coffee trees.

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Fast-forward to today, and the Seattle-based coffee giant is capitalizing on Trump’s federal tax reform. Following in the footsteps of countless other companies, Starbucks is rewarding employees with bonuses and expanding benefits for workers. That includes paid paternity leave and sick leave for hourly employees, along with a forthcoming wage increase.

By its own framing, Starbucks is simply living by its long-established values. But its statement still nods to the tax overhaul led by a president whose policies it once vocally opposed.

“Building on a long history of providing relevant, industry-leading benefits, Starbucks Coffee Company today announced a series of new partner (employee) offerings that span across wage and benefits,” the company said. “These offerings will total more than $250 million for more than 150,000 partners and are accelerated by recent changes in the U.S. tax law.”

Starbucks is not alone. The Walt Disney Company also referenced the “recently enacted tax reform” in an announcement about bonuses, despite the fact that its CEO, Bob Iger, made a public showing of stepping down from Trump’s advisory council after the president withdrew from the Paris climate agreement.

Similarly, Comcast and Apple both cited the tax reform law in their announcements about bonuses, while Walmart went a step further, saying outright that “tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.” (Walmart’s CEO made a point of criticizing Trump after Charlottesville, but remained on his business advisory council.)

And then there was AT&T CEO Randall Stephenson, who had even higher praise:

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Congress, working closely with the president, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world. This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.

Most of these statements, however, are carefully worded and don’t reference the president by name. It’s as if they’re whispering thank you without saying it directly. After all, Trump did just give them a massive tax break, slashing the corporate tax rate from 35% to 21%. And there’s no denying most companies benefit both internally and externally by handing out bonuses: It’s smart from a PR standpoint and a relatively easy way for companies to curry favor with employees.

But aren’t all these companies tacitly—and, in some cases, explicitly—handing credit to Trump and his party? This is a president who will find any opportunity to bloviate. With that in mind, it’s hard not to read the mentions of tax reform as congratulatory, as the president certainly is:

Anyone could have guessed Trump would milk the announcements as a talking point, but linking them to an increase in jobs is wishful thinking. None of these companies have outlined a clear plan to hire more workers, and the bonuses, in the scheme of things, are not all that significant. According to ThinkProgress, they amount to about $1.38 billion—a fraction of what these companies are saving through the $1 trillion corporate tax cut.

Plus, most companies have opted for bonuses in lieu of increasing wages (though some, like Walmart and Starbucks, are doing that as well). If the argument is that tax money will go toward hiring, and that in turn will increase efficiency and therefore wages in the long run, these company statements don’t bear that out. On the contrary, the companies are making a one-time expense that they won’t regret later, and more likely than not, will use the rest of their newfound wealth to line the pockets of shareholders.

All of this calls into question the facile explanation that companies are doling out benefits and bonuses to employees because of Trump’s tax cuts. What’s more, it feels like a silent endorsement from executives who certainly did not endorse Trump, but are happy to profit off his policy making.

About the author

Pavithra Mohan is an assistant editor for Fast Company Digital. Her writing has previously been featured in Gizmodo and Popular Science magazine.

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