(Reuters) - Jerry Zeitler says a sweeping Republican tax overhaul will encourage him to take a bigger bite next year out of his $3 million wish list of new equipment for the metal-stamping operation he runs outside Cleveland.

FILE PHOTO: Chuck Robbins, CEO of CISCO, speaks during an interview with CNBC on the floor of the New York Stock Exchange (NYSE) in New York, U.S., November 17, 2017. REUTERS/Brendan McDermid/File Photo

Not that much bigger, however.

Die-Matic Corp, which mostly serves the auto industry and has sales of more than $30 million, may spend $600,000, the president of the family-run company said, up from about $450,000 this year. A tax break is nice, but it will not prompt him to rewrite his spending plans entirely.

Thrift and caution among small businesses, and pressure from investors for big businesses to return any windfalls from a U.S. tax code rewrite directly to shareholders, pose a challenge to President Donald Trump and Republican congressional leaders.

Their tax plan is designed to kick start economic growth in part by offering new incentives for capital investment, which would allow businesses to lower their tax bills by writing off the cost of things like new machinery more quickly.

U.S. commercial and industrial loan growth has shrunk to almost flat at the end of November from nearly 14 percent at the start of 2015, Federal Reserve data shows.

And investment growth has likewise slowed to a near standstill. After a nearly 9 percent increase in 2014 and a nearly 10 percent jump in 2015, S&P 500 companies, excluding the capital-intensive energy sector, boosted capital expenditures by just 1 percent in 2016, according to Reuters data.

But surveys of business leaders consistently show that lackluster demand growth, and not access to capital, is what has been holding back investments.

And many companies face pressure to pass on any tax windfall to shareholders rather than invest in factories or hire workers.

For instance, Cisco System Inc's CSCO.O Chief Executive Chuck Robbins said at an investor conference in February that if the company was able to repatriate profit from overseas it would look at strategic investments and returning capital to investors.

The tax bill is partly aimed at prompting big companies to bring back capital parked overseas.

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But that aspect of tax reform could become a replay of the 2004 repatriation holiday under President George W. Bush, in which 843 U.S.-based multinationals brought back $362 billion in overseas profits at a deeply slashed tax rate of 5.25 percent. Most of that went to stock buybacks and dividend increases.

“The question is, are business leaders motivated that much by tax?” said BlackRock Inc BLK.N Chief Executive Officer Larry Fink recently at the Reuters Global 2018 Investment Outlook Summit in New York. “I think on the margin, yes. But it’s not overwhelming.”

Some big companies have pledged to ramp up investment.

AT&T Corp T.N Chief Executive Randall Stephenson said if the tax bill is signed into law, the No. 2 U.S. wireless company would boost domestic investment by $1 billion in the first year the new corporate rates are in place.

“Research tells us that every $1 billion in capital invested in telecom creates about 7,000 good jobs for the middle class,” he said.

The tax bill also features a provision that allows companies to quickly write off investments in new plants and equipment.

That could prompt companies to accelerate their investments to lower taxable income, but that would likely be seen mostly at companies where spending can quickly translate into higher production.

“Being able to expense capital expenditures immediately will pull forward some demand and bring companies over the hurdle of making new investments,” said Stephen DeNichilo, co-portfolio manager of the $870 million Federated Kaufmann Small Cap fund.

“At the end of the day, will someone buy a new dump truck if they don’t need it just because of a tax cut? Absolutely not,” he said. “But you will see more outlay for areas where there is an immediate economic payback.”

That approach would likely benefit automation companies as well as those that make equipment like conveyors and hoists that increase factory floor production, he said.

Among his holdings, DeNichilio expects that Milacron Holdings Corp MCRN.N, a plastics molding manufacturer with a market value of $1.2 billion that builds machines equipped with artificial intelligence, will benefit the most from a boost in capex spending because its products are used in a range of industries.

“This kind of investment pays for itself very quickly,” he said.

But for many smaller companies, the timing for ramping up spending might not be quite right.

Zeitler, the president of Die-Matic, says he usually splurges on capex during recessions, not expansions.

“The time to buy is when others are constricting, not spending, because that’s when we can buy things for 20 or 30 percent off,” he says.

Other companies will retain thrifty habits that have become the norm, especially in slow-growing industrial sectors.

David Shippoli, a manufacturing engineer at Dan T. Moore Co, a privately held company in Cleveland with factories across Ohio and Indiana, seldom buys new equipment and said tax breaks will not change that.

“Some large companies probably will spend more because they don’t care about spending money,” he said. He still might buy new machines, but only if they are the only option available, “not because of taxes.”