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American, Southwest Celebrate Corporate Tax Cuts by Giving $1,000 Bonuses to All Employees

Jan. 03, 2018
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2 min read
Los Angeles Exteriors And Landmarks - 2016
American, Southwest Celebrate Corporate Tax Cuts by Giving $1,000 Bonuses to All Employees
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Tuesday was a good day to be an employee of the US' largest and third-largest airlines (by passengers carried). Both American Airlines and Southwest Airlines announced $1,000 bonuses to all employees.

Southwest was the first to announce the good news. Airline CEO Gary Kelly "applaud[s] Congress and the President for taking this action to pass legislation," and announced three ways of reinvesting the anticipated tax savings. The most immediate initiative will be that:



All Fulltime and Parttime Southwest Employees employed with Southwest on Dec. 31, 2017, will receive a $1,000 cash bonus on Jan. 8, 2018.

In addition to these cash bonuses, Southwest announced an additional $5 million in charitable giving "as a result of tax reform." The airline will "put this money to work in the communities we serve and where our Employees work and live" throughout 2018. Also, Southwest expects to make "further investment in its Boeing fleet." While citing previously announced 737 MAX orders in its press release, the airline noted its 2018 growth plans remains unchanged.


Thanking "our country’s new tax structure," American Airlines also announced a $1,000 bonus "to each team member (excluding Officers) at [AA's] mainline and wholly owned regional carriers," on Tuesday afternoon. Per the press release, AA's bonuses will cost the company $130 million and will be paid out it in the first quarter of 2018.

Southwest will reap immediate benefits from the lower corporate tax rate. The airline provisioned $1.3 billion in taxes on $3.5 billion of pre-tax income in 2016. With the federal corporate income tax rate dropping from 35% in 2017 to 21% in 2018, the tax cut will save Southwest approximately $490 million each year at its current $3.5 billion in pre-tax profits.

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Comparatively, American Airlines' tax situation is even more generous. Thanks to accumulated tax losses for previous years, American Airlines hasn't paid any federal corporate income tax in years. However, the airline is still celebrating this tax rate change as it expects "positive long-term benefits for American" from the 14% drop in corporate tax rates. However, in the short-term, AA's $538 million in deferred tax assets will be substantially less valuable.

Featured image by GC Images

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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)

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  • Packed with credits foodies will enjoy
  • Solid welcome bonus

Cons

  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber and other dining credits
  • You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
  • Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
  • Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
  • Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
  • $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
  • $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
  • $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
  • Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
  • No Foreign Transaction Fees.
  • Annual Fee is $325.
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