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Companies Reap Cash Savings From Trump’s New Tax Law
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Good morning, CFOs. Large U.S. companies are enjoying a new tax law; American-made businesses clamor to get on a certain tariff list; plus, Nestlé fires its CEO.
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Verizon Communications is projecting it could save more than $1 billion as a result of the new tax law. PHOTO: GABBY JONES/BLOOMBERG NEWS
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Large U.S. companies are forecasting sharp declines in cash tax payments as they begin enjoying the new tax law.
The law accelerates or expands deductions for corporate research, interest payments and equipment purchases. Those retroactive changes are boosting cash flow, companies said in securities filings and analyst calls since President Trump signed the legislation July 4. That means more money for investments and stock buybacks and a bigger cushion against higher tariffs.
Verizon Communications, which paid $5.6 billion in cash income taxes in 2024, said it is lowering its projected 2025 cash tax costs by $1.5 billion to $2 billion. Lumen Technologies, a telecommunications company, said it requested a $400 million tax refund. Diamondback Energy, an oil-and-gas company, expects $300 million in savings this year, driving its cash tax rate to 15%-18% instead of 19%-22%. Leidos, an engineering company and government contractor, projects a $150 million cash-flow boost because of the tax law; that is more than a 10% jump.
Companies relying on renewable-energy tax credits or government healthcare spending face financial headwinds from the law, which partially paid for tax cuts by curbing breaks for wind and solar energy and lowering future Medicaid spending. But across many industries—including oil, retail, telecommunications and chemicals—the tax law means quick cash.
“The big question for me is employment and jobs,” said Rebecca Lester, a Stanford business professor who helped document a decline in corporate-research jobs after Congress forced companies to spread out deductions several years ago. “Will this cash be used to actually go out and rehire employees or will it be used in other ways?”
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Content from our sponsor: Deloitte
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As Pharma Companies Weigh Competing CRM Platforms, CFOs Play a Major Role
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Nearly every pharmaceutical company will need to update its customer relationship management (CRM) system in the coming years. It’s a complicated task that requires the leadership and stewardship of the CFO. Read More
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Tuesday
The Institute for Supply Management releases its Manufacturing Purchasing Managers’ Index for August.
The Census Bureau reports construction spending data for July.
Wednesday
Earnings: American Eagle Outfitters, Campbell’s, Dollar Tree, Hewlett Packard Enterprise, Macy’s, Salesforce
The BLS releases the Job Openings and Labor Turnover Survey.
The Federal Reserve releases the beige book for the sixth of eight times this year.
Thursday
Earnings: Broadcom
ADP releases its National Employment Report for August.
ISM releases its Services PMI for August.
Friday
The BLS releases the jobs report for August.
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What Else Matters to CFOs
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A worker at Sherrill Manufacturing, which says it is America’s last stainless-steel flatware manufacturer, operates a coining press used to emboss and shape flatware. PHOTO: HEATHER AINSWORTH/WSJ
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The Trump administration’s tariff policies are creating headaches, uncertainty and extra costs for scores of U.S. companies, from automakers to clothing importers. But for some companies that rely on American manufacturing, this new era of tariffs could give them a shot in the arm.
On the list released by the Commerce Department, more than 400 items imported to the U.S. would be hit with tariffs on their steel and aluminum content, from farm equipment, bulldozers and industrial robots to dumbbells, infant swings and infant walkers.
Unlike the so-called reciprocal tariffs that Trump announced in April, these tariffs are imposed under a national-security rationale. The reciprocal tariffs have been challenged in court. The sector-specific tariffs, by contrast, are imposed under a separate legal authority that is far more established and durable—Section 232 of the Trade Expansion Act of 1962.
Trump has said he is planning to expand the list of goods. Now some small businesses are pushing to get protectionist tariffs applied to more products.
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Nestlé said it dismissed Chief Executive Laurent Freixe with immediate effect following an investigation into an undisclosed romantic relationship with a direct subordinate that breached the group’s code of conduct.
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After more than a decade together at Kraft Heinz, ketchup is breaking up with hot dogs. The food giant said it plans to split its business into two companies, unwinding an industry megamerger that married two packaged-food behemoths.
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For the American middle class, it has been a summer of cooling confidence.
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Weeks before what is likely to be the Federal Reserve’s first interest-rate cut of the year, an unprecedented effort by President Trump to reshape the central bank is scrambling the dynamics on its policy committee.
📰 Other headlines
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“This is the problem that everyone wishes they had, which is ‘Oh, my God, my stock just went up 10x because of social media.”
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—Derek Zaba, co-chair of law firm Sidley Austin’s shareholder-activism and corporate-defense practice, as the army of retail traders who rallied around AMC Entertainment and GameStop a few years ago recently set their sights on Opendoor Technologies, pushing the stock up.
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Content From Our Sponsor: DELOITTE
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Q2 2025 CFO Signals Survey Results
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Nearly 1 in 4 surveyed chief financial officers say their finance functions will be using digital currency within two years. Is crypto set to take off in the corporate world? Read here
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The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy.
Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew.
You can reach us by replying to any newsletter, or email Walden at walden.siew@wsj.com.
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