Employees of Xante Corp. react to the announcement on Monday that they were about to receive bonus checks for $1,200. Xante CEO Robert Ross made the announcement the morning of Feb. 19, 2018, attributing the move to recent tax cuts. (Lawrence Specker/LSpecker@AL.com)
Mobile-based Xante Corp. handed out $1,200 bonus checks to most of its employees on Monday, as its CEO gave thanks to a Republican tax reform bill and Rep. Bradley Byrne.
Xante provides high-end printers and related software for use by professional graphics and printing operations. It employs a little over 100 people in Mobile and about 15 more in Europe. CEO Robert Ross said Monday that anyone who’d been with the company for a year or more was getting a $1,200 bonus, while those employed less than a year were getting a different amount.
Mobile employees whooped and cheered as Ross announced the windfall Monday morning. They also heard Ross explain that the company had additional plans for money saved as a result of tax cuts passed by Congress and signed into law by President Donald Trump in December. Among other changes, the tax bill significantly lowered the corporate tax rate.
Ross said Xante also planned to invest its windfall. The company recently acquired two startup companies that had a healthcare focus and would now be able to invest more in developing them. It also likely would invest money in a third startup development. “It allows us to fund new businesses within our business,” Ross said, and would lead to “a new level of growth for our company.”
“Those are going to take millions of dollars of investment and the tax cuts are really going to help,” he said of the new ventures.
Xante Corp. CEO Robert Ross, left, and U.S. Rep. Bradley Byrne prepare to hand out bonus checks to Xante employees on Monday, Feb. 19, 2018. (Lawrence Specker/LSpecker@AL.com)
“This is not from the federal government,” joked Byrne, as he prepared to help Ross hand out the checks. Ross nonetheless insisted that Byrne, who he described as a longtime friend, deserved credit. “We would not be here if it wasn’t for Bradley,” he said.
Since the tax reform measure passed, a number of major companies have announced bonuses or pay increases. The long-term effects of the changes remain unclear, however, and are tied to other federal budgeting and spending issues.
In October, Byrne spoke about the plan at a forum sponsored by the Mobile Area Chamber of Commerce. The plan hadn’t yet been formally announced, and negotiations about what it would contain were ongoing. He said at the time that he thought “this is going to be revenue-neutral or pretty close to revenue-neutral.”
On Monday, Byrne acknowledged a Congressional Budget Office analysis from late November, which estimated that the tax bill would increase the deficit by $1.4 trillion dollars over the next 10 years. But the congressman said that was a “static” analysis, which didn’t reflect the stimulating effect of lower taxes over the same time period.
“They say one and a half trillion dollars over 10 years,” he said. “But over those 10 years this tax bill is going to have the effect that you just saw here, across the American economy. Which is going to make the American economy grow at a much faster rate. If they economy grows at a much faster rate, people’s incomes go up, they pay more taxes, that tax revenue comes into the government. And if it runs at the rate we think it will, we think it will be revenue-neutral.”
More recently, White House Budget Director Mick Mulvaney testified before the House Budget Committee that the tax bill could cost the government more like $1.8 trillion in revenue over the coming decade.
Deficit concerns have also been raised by the budget released last week by Trump, with many analysts saying it would begin an era of $1 trillion-plus annual deficits.
Byrne hadn’t made a public statement on it prior to Monday, and didn’t speak to specifics. “I have not looked at the budget itself,” he said.
Without offering any direct criticism or endorsement of Trump’s spending proposals, Byrne said that Congress, not the president, decides how much money actually gets spent.
“The budget is not where we spend money,” he said. “The budget is just a blueprint. It’s more of an aspirational document. So the fact that the president has put something or not put something in the budget doesn’t mean that’s how we’re going to spend money or not spend money. That comes in these appropriations bills.”
Byrne said he hoped to challenge the volume of spending that’s considered mandatory. He doesn’t want to challenge Social Security, Medicare or veterans’ benefits, he said, but thinks other protected programs should be subject to review.
“We have to start emphasizing our role as the people responsible for spending money, and spend that money in a much more efficient and effective manner,” he said.
Trump’s budget contained relatively little money for his promised infrastructure campaign, allocating $200 billion and envisioning it as seed money to spark far greater state and private investment. Byrne said he didn’t see that as a setback for the planned I-10 bridge over the Mobile River.
“The bay bridge fits squarely within what the president proposed,” Byrne said. Plans call for a private company to finance the project — likely recouping its money through a toll — and the federal money will help spark that private investment. Byrne said he was confident the “showcase project” would proceed.
The real challenge, Byrne said, would be to secure funding for projects such as the widening of U.S. 43 and U.S. 45. “The rural roads are just as important,” he said. “But you can’t leverage private dollars for those.”
Abby Spangler and her daughter Eleanor Spangler Neuchterlein, 16, hold hands as they participate in a “lie-in” during a protest in favor of gun control reform in front of the White House, Monday, Feb. 19, 2018, in Washington. (AP Photo/Evan Vucci)