The Tax Law Has U.S. Companies Making Big Plans

The tax bill will have a significant impact on corporate finances, reports a recent Wall Street Journal article, although the effects “can vary widely by company.”

According to Natixis chief economist Joseph LaVorgna, analysts are expecting the legislation to “provide a 7% to 8% boost in aggregate per-share profits for companies in the S&P 500 this year,” a big portion of which will come from increased corporate spending. “Someone else’s capital outlay is another company’s income,” says LaVorgna.

The article cites examples of how the tax legislation is manifesting in corporate strategy, including the case of Kimberly-Clark Corp. and its plan to spend “hundreds of millions of dollars to put new machinery in one of its U.S. factories, even as it closes others and cuts thousands of jobs.” The strategies and rationales of several other companies are discussed, including such names as catering and uniform company Aramark, Verizon, and Bank of America.