There's not much evidence that the income boost to the average American household from cutting corporate taxes last December, "very conservatively" estimated at $4,000 by the White House's economics team, has been materializing.
To be fair, this was a longer-term idea, related to better after-tax returns on capital and thus greater capital investment.
Top executives, though, are one group of workers that already has done just fine thanks to corporate tax cuts. And it is not so much what they are getting paid this year but what they have kept from all the previous years.
The details of executive compensation are found in corporate proxy statements, and they all sound alike. Big companies all say they are eager to pay for performance and tie executive pay to long-term shareholder returns.
At least a little skepticism seems fair for how companies really pay "workers" tens of millions of dollars, yet it's hard to imagine directors dropping a bonus on a CEO for increased profitability when all that happened is their federal government just cut the tax rate to 21 percent.
A lot of big companies did not pay the old 35 percent statutory rate, of course, yet domestic companies like retailers, banks and insurers could not as easily lower their tax bills. They couldn't easily claim a research-and-development tax credit or keep profits stashed in an Irish subsidiary.
They had reason to gripe. The S&P 500 average tax expense percentage was in the mid-20s, and Target Corp.'s effective tax rate has lately been around 32 to 33 percent. UnitedHealth Group's tax expense even exceeded 42 percent of pretax income as recently as 2015.
Earnings jump
The tax cut is making a big impact on the reported financial results of companies like that, as you would expect. UnitedHealth just reported that earnings from operations, a pretax measure, increased 13 percent in its second quarter, while after-tax earnings per share jumped by 28 percent.