Once again, President Trump touted the supposed benefits of the new tax law at an April 12 ceremony in the Rose Garden. “Our massive tax cuts are growing paychecks all over our country [and] creating jobs and expanding the American dream just like we said would happen,” he said, in a surprisingly disciplined statement.
This declaration — a popular one among the right-wing — is patently false, as a recently launched “Trump Tax Cut Truths” website from the Americans for Tax Fairness (ATF) shows.
ATF analysts compiled data on the 1,000 largest U.S. firms, as well as smaller companies that have announced bonuses or wage hikes. What they found is that only 4 percent of American workers are receiving a bonus or raise in the wake of this tax bill. The annual tax cuts these corporations are estimated to enjoy amount to nearly $61 billion — nine times more than the total bonuses and wage increases they’ve given their workers.
The firms that have neglected to give out any benefits to their workers, what ATF calls the “Corporate Cheapskates,” include some of the country’s largest, such as Amazon, Google parent company Alphabet, and Berkshire Hathaway. Within the top 500 U.S. corporations, just 65 have announced wage hikes or bonuses. This means the overwhelming majority of companies, big and small, did nothing to help workers out after the passage of this bill that is, according to the President, “growing paychecks all over the country.”
So what are these companies up to instead of helping their workers? The Americans for Tax Fairness tracker allows you to find out how specific firms are responding to the massive windfall they’re receiving thanks to the Trump-GOP tax bill.
Many companies are using their tax savings for massive stock buybacks. In fact, the amount they’re spending on buybacks is 37 times as much as they’re handing out in bonuses and raises. By artificially increasing share values, such buybacks reward shareholders and executives who receive stock-based pay. According to ATF, for example:
- Pepsi announced a $15 billion stock buyback program earlier this year
- Wells Fargo is going to buy back $22.5 billion worth of stock
- Lowe’s announced a $5 billion buyback
Others have undercut the president’s claims even further by announcing job cuts. For example:
- Walmart, which cut 14,000 jobs concurrently with an announcement of one-time bonuses. The retail giant is expected to garner $2.2 billion per year in tax cuts
- Kimberly-Clark, which announced the cutting of 5,500 jobs, as part of a restructuring plan financed through savings from the tax reform
- Macy’s, where they announced 5,000 layoffs and the closing of 11 stores
These companies are choosing not to share the wealth, even on the heels of the massive corporate welfare program that is the new tax law. This is hardly surprising, given the extreme disparities within large U.S. corporations. As a result of a new SEC regulation, publicly held U.S. firms are now required to report the pay gap between their CEO and their median worker. The pay ratios at some of the top job-cutting firms are among the most outrageous:
- J. C. Penney is cutting 1,510 jobs while paying their CEO $10.8 million, 735 times more than the $14,366 their median worker makes. The retailer has not handed out any “tax cut” bonuses or pay raises
- Pepsi is cutting 1,100 workers and paying their CEO $31.1 million, 650 times as much as their median worker. The firm has also announced bonuses up to $1,000 for full-time employees. The total bonus payout will around $100 million, a figure dwarfed by the $15 billion the firm is blowing on stock buybacks
- Macy’s is laying off 5,000 workers, even as their CEO is paid $11.1 million, 805 times more than the median worker making $13,810
- United Technologies, which in January closed the famed Carrier plant in Indiana, paid their CEO $17 million, 235 times as much as their median worker
House Minority Leader Nancy Pelosi was crucified for her comments that these “tax cut” bonuses were like “crumbs.” But while she might’ve been more tactful, her broader point was absolutely correct. American workers are getting only a tiny fraction of the benefits of a tax law designed to reward corporations and the wealthy. With their tax cut tracker, Americans for Tax Fairness has made it easier to find out exactly how small those crumbs are.
Top Photo | President Donald Trump and Treasury Secretary Steven Mnuchin arrive at the Treasury Department in Washington, April 21, 2017, where the president was to sign an executive order to review tax regulations set last year by his predecessor, as well as two memos to potentially reconsider major elements of the 2010 Dodd-Frank financial reforms passed in the wake of the Great Recession. (AP/Susan Walsh)
Brian Wakamo is a Next Leader at the Institute for Policy Studies.
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