Comcast, AT&T trickle down $1K bonuses to employees after corporate tax bonanza

Paul Ryan speaks at press conference
Speaker of the House Paul Ryan, R-Wis., spearheaded passage of a corporate tax break that will see Comcast's and AT&T's rates drop into the low 20% range. (speaker.gov)

After the Republican Congress passed a massive corporate tax break that will save them billions over the next few years, Comcast and AT&T loudly touted the handout of millions of dollars in employee bonuses. 

At Comcast, the trickling down following the reduction of the corporate tax rate from 35% to 21% included $1,000 bonuses to more than 100,000 “eligible frontline and non-executive employees.” 

AT&T also said that it will give more than 200,000 U.S. workers $1,000 bonuses. 

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Determining what corporations like AT&T and Comcast actually pay to the federal government each year is tricky. But let's just say that with an effective tax rate currently standing at 32.7%, AT&T's federal tax expenditures dwarf its $200 million outlay in employee holiday bonuses—which were a standard U.S. business practice dating back before the Reagan tax cuts in the 1980s. 

According to Forbes, AT&T is the 20th most taxed corporation in the U.S.; Comcast ranks 13th.

Meanwhile, as both Comcast and AT&T also celebrate the burden of Title II internet regulations being lifted by the FCC, both telecom companies announced major infrastructure upgrades. 

Comcast CEO Brian Roberts said in yesterday’s statement announcing the bonuses that Comcast will spend $50 billion over the next five years “investing in infrastructure to radically improve and extend our broadband plant and capacity, and our television, film and theme park offerings.”

It should be noted that the trajectory of Comcast’s capital expenditures had markedly increased even before this week's corporate tax bonanza. Overall, Comcast’s capex increased 7.3% to $7.597 billion in 2016, and it’s projected to grow to $8.445 billion in 2017. 

Meanwhile, AT&T said it will spend an additional $1 billion on network upgrades in 2018. According to the Washington Post, the telecom is expected to spend around $22 billion on network upgrades in 2017; adding $1 billion would represent a modest increase of 4.5%. 

"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," AT&T CEO Randall Stephenson said in a statement. "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.”

Budget experts outside the government estimate that the federal budget deficit—government expenses exceeding revenues—could swell to $1 trillion in 2018 once the tax cuts take effect.