Top executives at 89 percent of large U.S. companies are seeing tax savings as a result of the tax reform bill passed late last year, and they plan to continue using their savings to invest in growth-related activities, according to a survey of CEOs, COOs and CFOs conducted by PwC.
When allocating tax savings to individual categories, 46 percent of companies’ aggregate savings will go to growth and customer service initiatives, including 9 percent on research and development, 7 percent to long-term strategies and 6 percent to new digital capabilities. Five percent of savings are expected to go to lower prices.
Human capital investments will account for 37 percent of savings, with 8 percent going toward hiring, 8 percent toward higher wages, and a combined 12 percent toward improved benefits and higher retirement plan contributions. Nine percent of savings are set to go toward paying off debt, and just 6 percent of tax savings are projected to go toward share buybacks, according to respondents.