Many economists are skeptical that savings from the Republican tax plan will transform business decisions. Manufacturers welcome tax savings, but provisions designed to help them may expire before they can do any good.
ORO GRANDE, Calif. — Republicans have pitched their tax plan as an economic godsend that will offer deliverance from middling growth and set off a torrent of investment, hiring and raises. But at a quarry here in Southern California’s high desert, the outcome does not look so straightforward.
The pit of rock belongs to CalPortland, which mines limestone to create the cement that goes into stadiums and hotels. (The company also has several locations in Washington state, including the Seattle Cement Terminal and Seattle Ready Mix Plant.) The company would hardly object to keeping a chunk of profits that currently goes to the government. But the extra cash probably would not be enough for CalPortland to expand immediately in ways requiring serious hiring.
“Ten percent extra profit would be good,” said Steven Regis, a senior vice president for corporate services at the company. “But it’s not going to fund big projects.”
Like executives across the country, Regis has spent the last few weeks scouring the House and Senate tax proposals for signs of hope for his industry — and new sources of pain.
Many economists are skeptical that the tax savings will transform business decisions. And when President Donald Trump’s chief economic adviser recently asked a room of chief executives whether lower taxes would prompt them to invest more, only a few hands shot up.
Regis’ deliberations suggest why those executives — especially at manufacturers like CalPortland, the companies at the core of Trump’s vision for the economy — may have muted expectations.
Many welcome tax savings, but each industry and company will make different calculations about whether and how to spend that money. Much will depend on what customers and suppliers do and, of course, on the vicissitudes of the U.S. economy.
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“You always have competing interests for that cash,” Regis said. “Do you pay dividends? Do you buy new equipment? Do you buy out competitors? Do you add employees? Do you pay employees better?”
Many CalPortland drivers are unionized, and he expects a tax cut to produce demands for the wage increases that Republican sponsors…