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It won’t take long to determine whether the sharp cut in the federal corporate tax rate will spur business lending, investment and job creation in 2018, according to analysts, economists and business leaders.

Likewise, they say it should become clear sooner than later whether the reduction from 35 percent to 21 percent only spurs corporations to do more stock repurchases and dividend hikes to benefit shareholders or to retire debt earlier.

The additional revenue also could provide fresh wind to the corporate mergers of the past two years that has spurred several deals worth tens of billions of dollars.

Immediate steps taken by BB Corp., Bank of America Corp., PNC Financial Services Group Inc. and Wells Fargo Co. have included providing one time bonuses to employees and increases to their minimum wages.

Those are steps that pro worker advocates say they could have taken financially before the tax rate cut bill was signed into law Friday by President Donald Trump.

The banks say assurances of the corporate tax rate cut going into effect made them more comfortable with making financial commitments ranging from $100 million to more than $450 million. House Speaker Paul Ryan, R Wis. a main proponent of the tax cut bill has said the public and media should not discount that employees would be among those benefiting from share repurchases and higher dividends.

Analysts said the prospect of a corporate tax rate cut played a motivational role in British American Tobacco Plc spending $54.5 billion to buy the 57.8 percent of Reynolds American Inc. stock it didn’t already own. Reynolds already represented BAT’s largest individual revenue stream. economy. a better place to do business,” Vitner said.

“This should spur business fixed investment and ultimately help boost productivity growth.”

However, several media and analyst reports predict already cash flushed corporations aren’t likely to add jobs and equipment until they see more consumer demand for their products and services. The Federal Reserve said that as of June 30, non financial companies’ liquid assets were at a record $2.3 trillion.

Conversely, analysts say debt weary middle class consumers are not likely to get enough of a tax cut in their paycheck to spur a significant amount of additional spending.

A Bank of America/Merrill Lynch survey of more than 300 chief executives found their top options with the forthcoming new revenue would be paying down debt or buying back stock. 5 Goldman Sachs industry conference that “I believe you’re going to see a very bullish response (to the corporate tax rate cut) from at least small and mid sized businesses, if not Fortune 100 (companies).

“They will move quickly in terms of reinvesting in all this equipment because they will be getting 100 percent write offs and a lower tax rate.”

Once that happens, King said he sees those businesses “moving to expansionary type of investments, built off of an expectation of a broader, faster growing economy, which I fully believe will happen.”

King has said for years that “Main Street” businesses BB core loan targets “have a backlog of activity” to unleash at the right economic time.

“I’ve talked to hundreds and hundreds of CEOs over the last 12 months,” King said. “It’s true that they are driving trucks for 250,
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000, 300,000 miles and using 20 year old computers.

“With the talk of changes, we’ve seen some renewed interest in what I call passive investing that is beginning to replace some of the trucks and some of the computers.”

As far as BB goes, King believes its tax cut benefit will go one third to investors and shareholders, one third to the bank’s bottom line and one third toward its ongoing reinvestment initiative, such as its digital retail network.

On Friday, BB announced raising its minimum wage from $12 to $15, effective Jan. 1, and providing a one time bonus of $1,200 to 27,000 employees, “most of whom do not receive incentives or commissions.” The bonus is estimated to be worth $32.4 million.

By comparison, BB had record net income of $2.26 billion for fiscal 2016.

BB also will provide $100 million to its philanthropic fund.

“BB mission is to make the world a better place to live, so it makes perfect sense to share these benefits and continue making a positive difference in the communities we serve,” King said Friday.

King said in October that BB is preparing to end a self imposed moratorium on major acquisitions.

However, he cautioned not to expect BB to expand outside its 15 state territory, and that it’s possible that the nation’s eighth largest bank could scale back in some markets,
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if not leave outright.