Trump's tax cut plan promised working class job creation and pay raises. Where did all the money go?
Famed bank robber Willie Sutton once explained that he busted into banks because "that's where the money is." What a small-timer! Corporate thieves - including the biggest banks - know that the big scores are in the tax code and federal budget. America's superrich establishment decided to woo Trump and his fanatical constituency to back their agenda of plutocratic plunder.
It's working. The big legislative accomplishment of the guy who claimed to be a working-class hero was his 2017 Christmastime signing of the Tax Cuts and Jobs Act. As most Americans now realize, the tax cut was not for them but instead was a disgraceful trillion-dollar-a-year giveaway to corporate giants and their wealthiest shareholders.
According to Americans for Tax Fairness, hundreds of TCJA's corporate backers are already making a killing. In just the first three quarters of 2018, big business quietly pocketed stunning tax savings they would have -- and should have -- paid to support America's public needs:
- Apple: $4.5 billion
- AT&T: $2.2 billion
- Bank of America: $2.4 billion
- Verizon: $1.75 billion
- Walmart: $1.6 billion
And what about the "jobs" part of the act? Its core promise was that CEOs would devote their huge tax gift to new jobs and pay raises for working stiffs. Indeed, in 2017, about three dozen brand-name giants funded a lobbying front, deceptively named Reforming America's Taxes Equitably, to promote the notion that a tax break would "boost job creation."
But ThinkProgress found that in 2018, RATE members -- including AT&T, Capital One, CSX, Ford, General Dynamics, Intel, Kimberly-Clark, Lockheed Martin, Macy's, Northrop Grumman, T-Mobile, Verizon, Viacom and Walmart -- instead eliminated more than 100,000 U.S. jobs. Verizon, for instance, promptly offered a "voluntary severance package" to 44,000 employees and offshored thousands of its U.S. jobs to India. It was "an opportunity to find more efficiencies," the CEO told workers, "and help expedite ... an innovative operating model for our future." Or, to put it more simply: It was greed.
Ah ... there you have it: Forget America's fundamental values of justice and opportunity for all and don't expect even a modicum of honesty from rich shareholders and top executives. For example, Kevin Hassett, a far-right corporate ideologue chosen by Trump to head the White House Council of Economic Advisers, flat-out lied that the corporate gifts would spark "an immediate jump in wage growth" averaging as high as $9,000 a year.
Got yours yet?
So where did the money go? To the top. After all, only the tax giveaways were mandated -- not a dime in obligations (not even thank-you notes) was written into law. With no strings attached and union voices largely hushed or marginalized, top executives and board members spent it on themselves and their big investors, hiding their grubby motives behind "stock buybacks," an accounting gimmick that hikes the pay of bosses who do nothing to earn it. The three-step fraud:
1. Humongous Incorporated gets a $1 billion tax gift from Uncle Sam.
2. HI quickly spends the booty to buy its own stock, which inflates the shares' value. 3. Since HI top executives are awarded big chunks of company stock -- (SET ITAL)abracadabra!(END ITAL) -- they can reap huge gains by selling that stock at the inflated price.
Workers, who mostly own no stock, gain little to nothing from these buyback scams. Today's corporate ethic (shamelessly practiced by the president) is clear: Take the money and run. For example, as Politico reported last July:
- Two weeks after AbbVie, a pharmaceutical giant, announced a $10 billion buyback in February, its stock price soared, and eight top execs cashed in $27 million in stock.
- After Mastercard's $4 billion stock buyback, its CEO cashed in for a personal payday of $44 million.
- After Oracle jacked up its stock price with a $12 billion buyback, its co-CEO cashed in a whopping $250 million in shares.
All is not lost. While the piggiest corporations gorge themselves at the public trough, a growing number of their corporate cousins have stood up for a better way of doing business: B Corporations. The B stands for benefit, referring to these corporations' pledge to benefit workers, the community and the environment. The B Corp community works toward lower levels of poverty and inequality, a healthier environment, stronger communities and high-quality jobs with dignity. For more details and a list of B Corps, go to bcorporation.net.
Populist author, public speaker and radio commentator Jim Hightower writes "The Hightower Lowdown," a monthly newsletter chronicling the ongoing fights by America's ordinary people against rule by plutocratic elites. Sign up at HightowerLowdown.org.