AT&T for months has pledged to increase investment spending if US tax reform is approved, but the operator finally attached a number to that promise: $1 billion.
AT&T today indicated it will boost 2018 investments by $1 billion if the tax reform bill currently being considered by Congress is signed into law.
Unveiled earlier this month in the US House of Representatives, the legislation would slash the corporate tax rate from 35 per cent to 20 per cent and implement a minimum tax of 10 per cent on profits earned abroad by US subsidiaries. The bill would also allow companies to write off capital expenditures for five years.
“If the House bill is signed into law, we’d commit to increase our domestic investment by $1 billion in the first year in which the new rates are in place,” CEO Randall Stephenson said in a statement. “Research tells us that every $1 billion in capital invested in telecom creates about 7,000 good jobs for the middle class.”
AT&T said $1 billion would be used to fund the operator’s residential and business fibre builds next year. Over the longer term, the operator said the lower tax rate would also provide an incentive for further incremental capital investments for fibre and 5G builds.
In 2016, AT&T spent $21.5 billion on capital investments across its businesses.
Sprint declined to comment on the tax package immediately after its release, and neither Verizon nor T-Mobile responded to a request for comment. However, executives from both Verizon and T-Mobile expressed support for tax reform immediately after President Donald Trump’s election in late 2016.
US wireless industry association CTIA has also backed tax reform, noting in a statement that lowering the corporate tax rate will make “America more competitive in the global market”.
The Washington Post reported Republican lawmakers in the Senate are considering a delay in the corporate cuts proposed in the House plan, implementing them in 2019 rather than next year.
Lawmakers are also reportedly looking for ways to offset some of the proposed cuts after a report from the Congressional Budget Office released Wednesday indicated the package would increase the federal budget deficit by $1.7 trillion over 10 years.
In October, Goldman Sachs gave tax reform a 65 per cent chance of passage.