Manufacturers campaigned hard for tax reform last year, promising that the historic law would accelerate growth in wages, investments and job creation. There have been some doubters. But so far, it is looking like U.S. businesses are keeping their promise, and a new report from CNBC confirms that small manufacturers in particular are feeling the effects.
CNBC reporter Ylan Mui visited Arnold Packaging in Baltimore, Maryland, to see for herself how tax reform is impacting small manufacturers on the shop floor and beyond. Thanks to the tax law, Mui reported, Arnold Packaging is “gearing up for a major expansion.”
The tax law not only freed up cash flow for Arnold Packaging, but allowed the company to write off expenses on equipment.
According to Mick Arnold, president of Arnold Packaging, the company reinvested its savings by raising salaries by 4 percent for employees in the manufacturing facility and purchasing more equipment to meet demand.
“We are constantly making reinvestments in our people, not just equipment, not just automation, but in our people,” Arnold said. “Our workforce is critical to our success.”
“I got some data from S&P Global Markets that shows that [capital expenditure] spending is up 25 percent during the first quarter for companies that have reported so far,” Mui said in her report, “and experts are telling me that the effect could be even greater at small and medium-sized businesses like this one.”
Watch the CNBC report below:
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