Tax Reform Delivers for Trucking and the American Economy
By Chris Spear, President and CEO of American Trucking Associations
Apple made big headlines this week as it announced a $350 billion investment in its U.S. operations, thanks in part to the historic tax reform package that was enacted just before the end of the year. Companies by the dozens released year-end bonuses and some have even announced wage increases.
The trucking industry shares the exuberance of these companies and sees brighter economic days ahead. As President Trump said last October,
“When your trucks are moving, America is growing.”
Thanks to the effort of so many, from the President down, that package has given the trucking industry a boost that will be felt for the months and years to come.
The now-enacted tax bill will give companies more money to reinvest in their people and equipment. By reducing the corporate tax rate, tax reform has helped unlock the investment potential of carriers that historically operate on razor thin margins.
What do these investments look like?
They include stepped up efforts to increase employee pay and recruiting. Trucking is always looking for qualified drivers and technicians. Paying less in taxes allows fleets to compete for the best talent by paying more to the driver, the mechanic and the dispatcher. These are quality, middle-class jobs that cannot be outsourced overseas.
According to a recent survey of ATA members, 50% of carriers plan to either increase wages generally or offer hard-working Americans a one-time bonus — putting more money back into the U.S. economy.
Those investments also include accelerated purchases of new trucks, as orders for new vehicles surged 15% in December — hitting the highest total for the final month of a year in three years.
Similarly, trailer orders have been on the upswing. The increased flexibility to invest has pushed trucking companies to pull the trigger on buying newer, safer, cleaner, more efficient vehicles — a win for the companies that make these trucks and trailers and for the environment in addition to our industry.
ATA’s survey found that 47% of fleets plan to take the windfall from tax reform and invest it in new equipment. Those investments are in new trucks, new trailers and new safety technologies they would otherwise not be buying.
Beyond the direct effect, every time another industry invests in new equipment, or an individual uses some of the money they’re getting back from tax reform on capital expenditures or goods, a truck most likely delivers it — as it does for roughly 70% of the nation’s freight.
At the end of the day, tax reform is reigniting America’s economy, stimulating job growth and providing employees with higher pay and benefits as a result. A growing economy means more trucks on our roads to keep store shelves stocked and Americans’ homes filled. Everyone can be thankful for that.