A new survey finds U.S. companies, anticipating tax savings from the newly passed Tax Cut and Jobs Act, are using their cash windfall to reinvest in their workforce.
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According to the EY Tax Reform Dollar Deployment Survey, conducted jointly by Ernst & Young LLP’s (EY) Transaction Advisory Services and tax businesses, 89% of companies plan to enhance compensation due to the new GOP tax reform law.
“We’re seeing that the majority of the savings from tax reform is going to be put back in growth and innovation, which is great news for the U.S. economy,” EY Americas Vice Chair Bill Casey said Monday during an exclusive interview with FOX Business’ Maria Bartiromo.
Casey says the savings will push U.S. businesses to remain competitive and innovative while strengthening the overall economy.
In addition, the survey found that almost three-quarters of mid-cap companies are likely to accelerate corporate mergers and acquisitions (M&A) deals.
“This is going to represent salary increases, one-time bonuses and also benefits, other benefits to employees. And then some of the companies plan on giving some of the savings back to consumers,” Casey told Bartiromo.
The survey indicates that 47% of companies are looking to accelerate growth and innovation and 42% are planning to use those savings to pursue M&A.
“Growth isn’t just there from an organic perspective and so we expect more deals through innovation,” Casey said.