But, just over a year after Congress enacted sweeping corporate tax cuts meant to jolt the economy, a shadow has crept into the picture: Layoffs are also on the rise.
Economists say tax cuts often fuel investments like mergers and acquisitions, which frequently result in job cuts — at least initially — as some workers become redundant. The reasons driving layoffs vary. Banking giant Wells Fargo announced in September it was cutting five to 10 percent of its workforce as it focused more on internet banking.
The value of mergers and acquisitions in the United States jumped 17 percent last year to $1.94 trillion, the second highest since 2000, according to financial data firm FactSet. However, Rebecca Lester, professor of accounting at Stanford University, said tax cuts sometimes have failed to produce the desired outcome.