America's biggest companies are saying exactly what Republicans want to hear about the massive GOP tax law

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President Donald Trump and House Speaker Paul Ryan

• Republicans are banking on an economic boost from their massive new tax law as a part of their 2018 midterm strategy.
• According to a new analysis, 84% of S&P 500 companies talked about the new tax law on their fourth quarter earnings call.
• Of those, 179 said they plan to invest savings in workers or new equipment.
• This is good news for the GOP, since new investments could help drive economic growth.

Republicans have staked their 2018 fortunes in large part on their signature legislative achievement under President Donald Trump: their massive overhaul of the federal tax code, which they said would lead to an economic jolt from increased business investment.

A new analysis of public statements from some of the country's largest companies may back up that argument.

The analysis of 452 fourth-quarter earnings calls from S&P 500 companies - conducted by Hamilton Place Strategies, a public affairs firm - found that 84% of the firms brought up tax reform during their calls.

According to Hamilton Place's analysis, companies talked about how they would use these tax savings in five main ways:

• 179 companies talked about using the savings for investment, like new equipment or increased wages.
• 131 talked about returning some of the gains to shareholders in the form of dividends or buybacks.
• 42 talked about new merger-and-acquisition possibilities.
• 31 talked about contributing more to charity.
• 29 talked about paying down debt.

Of the companies that talked about investments or returning money to shareholders, 45% told analysts they planned to do both, according to the analysis. And 39% spoke exclusively about investments, while 16% only talked about buybacks and dividends.

Hamilton Place Strategies

Looking at the types of investments the companies are planning, Hamilton Place found that most of the companies were focused on new equipment and expansion:

• 157 of the 179 that talked about investments said they would spend money on capital expenditures.
• 55 said they would pay out employee bonuses or increases wages.
• 50 mentioned increases to other employee benefits.
• Five talked about hiring new employees.

The way the firms are talking about deploying their savings should come as good news to Republicans.

Other data has not been as encouraging for the party. Poll numbers have shown that workers have still not noticed an increase in their paychecks. And capital expenditure expectations have so far not picked up.

The analysis doesn't measure the relative allocation of the new savings. As Democrats have consistently argued, so far the dollar amount of buybacks initiated by companies after the tax law passed has far outpaced wage increases and one-time bonuses for workers.

On the other hand, substantive pay boosts and building new equipment takes a bit longer than buyback announcements.