Local Toll Brothers Community – Woodlands At Ridley Creek – Media PA
Horsham based luxury home builder Toll Brothers has been among the nation’s firms paying 35% a year in taxes on it’s corporate profits, the top corporate rate. Included in the currently proposed revisions before Congress in the country’s tax code is a call to cut the top rate to 22% or lower.
What is a company to do with such a windfall?
Toll recently reported sales and profit results for the fiscal year 2017 with net income totaling $535.5 million, or $3.17 a share, up from $381 million and $2.18 a share the year earlier. Annual revenues topped $5.8 billion, a 12% increase, while the company delivered 7,151 housing units to buyers, up 17%.
Is Toll going to back up the Republican claim that a cut in the corporate rate will trickle down to consumers?
Apparently not.
Douglas C. Yearly, Toll Brothers CEO, was asked in a recent investor conference call after Toll’s earnings were posted.
“What would you do with that extra $100 million to $150 million” from lower U.S. income taxes?
The CEO responded that Toll Brothers estimated the savings more conservatively at $80 million to $100 million next year.
“We don’t have any particular direction for that cash,” Yearley said.
Toll officials said the company plans to keep growing but also will be paying more to investors and top executives by repurchasing more shares to drive the price up, and by continuing the dividend that Toll started paying shareholders last year.
A $80 – $100 million dollar savings by Toll Brothers alone, which is not among the list of corporate giants, gives you an idea of the breadth of this corporate tax cut.
So not much will be trickling down after all – sounds more like a trickle up.
Full article: Philadelphia Inquirer – December 6, 2017 – Luxury Homebuilder Toll Bros.: Sales rise, tax overhaul ‘a wash’ for upscale buyers
Wallingford PA Real Estate – Wallingford, PA 19086
