The Trump administration has pushed its tax reform framework with a big emphasis on middle class and working class Americans. In particular, the Trump administration has highlighted that reducing the statutory federal corporate tax rate from 35% to 20% would benefit workers.
Marriott (MAR) CEO Arne Sorenson has been outspoken in supporting corporate tax reform, but he said that bringing more cash onshore would not cause him to hire more workers or raise wages.
“When you look back over the last twenty years or so, the corporate community has tended to overstate the impact of tax reduction on investment in their business,” he said at Yahoo Finance’s All Markets Summit. “From our perspective, we’re not cash starved, we have plenty of resources, and therefore where we’ve got an opportunity to invest and it makes sense for our business model, we’re investing.”
The Chairman of the President’s Council of Economic Advisers Kevin Hassett has put out an analysis that corporate tax reform would lead to at least a $4,000 wage increase annually on average for workers.
But Sorenson’s comments raise questions about how long workers would have to wait for that raise.
“If we had tax reform, that money would come back to the United States” he said. “We probably wouldn’t incrementally invest but we would return it to our shareholders…What happens here: money comes back, gets invested back into the US economy, the economy grows, and with it’s growth, we end up building more hotels and hiring more people.”
Stagnant wage growth has been lamented by politicians on both sides of the aisle, particularly as corporate profits have soared.
While Sorenson did call the trillions of dollars from US companies parked overseas “economically unwise,” he did not point to an immediate boost to workers’ earnings.
Nicole Sinclair is markets correspondent at Yahoo Finance.
For more from the interview with Marriott’s CEO, please see:
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Marriott CEO: Some hotels in Puerto Rico could be closed for a year or two
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