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Health care companies are big fans of the GOP tax reform. Photo: Bryan R. Smith / AFP via Getty

Health care companies at the J.P. Morgan Healthcare Conference in San Francisco are drooling over the financial windfalls they expect to reap from the Republican tax overhaul signed into law before Christmas.

Between the lines: Health care firms — many of which have a vast majority of their business in the U.S., if not all of it — expect to see billions of dollars in corporate tax savings. Companies plan on using that money to pay down debt, buy back stock or acquire competitors — not to funnel higher wages back to workers.

What we're hearing: Tax reform was the topic on the top of most analysts' and investors' minds on the first day of the conference. Here's what a handful of health care executives said.

  • Cardinal Health: The tax changes are "important and positive for us," said Jorge Gomez, the chief financial officer of the drug and device distributor. The elimination of the manufacturing deduction offsets some of the benefit of the lower corporate tax rate, but Cardinal Health is "really excited" about the long-term effects, Gomez said.
  • Express Scripts: The pharmacy benefit manager expects $850 million in corporate tax savings. "We will not be sitting on that cash, I can promise you that," CEO Tim Wentworth said. (Translation: mergers and acquisitions, with no mention of higher worker wages.)
  • Abbott Laboratories: Even though Abbott already has an effective tax rate of 16.5%, lower than the new rate of 21%, the company still likes the new floor and expects to pay down more debt immediately. "What we like about tax reform is the flexibility it is going to provide to us," CFO Brian Yoor said. "It's not unfavorable to Abbott."
  • Pharmaceutical companies large and small view the tax overhaul as a major win for their industry.

Go deeper

Dion Rabouin, author of Markets
1 hour ago - Economy & Business

Everyone's bullish

Illustration: Sarah Grillo/Axios

Following positive vaccine news and the run-up in global equities punctuated last week by the Dow hitting 30,000 points, investors are again throwing caution to the wind and growing more uniform in their bets that stocks will continue to rise.

Between the lines: The resurgence of traders' risk appetite has some urging caution, as unanimity in either excitement or fear historically has proven to be a contrarian signal for the stock market.

Salesforce rolls the dice on Slack

Illustration: Sarah Grillo/Axios

Salesforce's likely acquisition of workplace messaging service Slack — not yet a done deal but widely anticipated to be announced Tuesday afternoon — represents a big gamble for everyone involved.

For Slack, challenged by competition from Microsoft, the bet is that a deeper-pocketed owner like Salesforce, with wide experience selling into large companies, will help the bottom line.

FBI stats show border cities are among the safest

Data: FBI, Kansas Bureau of Investigation; Note: This table includes the eight largest communities on the U.S.-Mexico border and eight other U.S. cities similar in population size and demographics; Chart: Naema Ahmed/Axios

U.S. communities along the Mexico border are among the safest in America, with some border cities holding crime rates well below the national average, FBI statistics show.

Why it matters: The latest crime data collected by the FBI from 2019 contradicts the narrative by President Trump and others that the U.S.-Mexico border is a "lawless" region suffering from violence and mayhem.