From the article at https://www.huffingtonpost.com/entry/nancy-pelosi-is-right-about-workers-getting-crumbs-from-the-tax-bill_us_5a7dc5cbe4b0c6726e12ce62
“The tax bill slashed the corporate tax rate from 35 to 21 percent, a windfall Democrats said companies would waste on share buybacks instead of more productive investment. After Trump signed the bill into law, Republicans seized on news that dozens of companies announced they would give their workers bonuses specifically because of the law.
“Pelosi was not impressed. ‘In terms of the bonus that corporate america received versus the crumbs that they are giving to workers to kind of put the schmooze on is so pathetic,’ she said last month.
“The thing is, Pelosi’s crumbs comment is fair and accurate. By Republicans’ tally, more than 250 businesses have doled out some $3 billion worth of bonuses so far. The Joint Committee on Taxation expects the corporate tax cut by itself to lose $101 billion worth of revenue this year alone.
Crumb (n) — a very small amount of something.
Google dictionary
“The bonuses are also a small amount of money compared to what firms are throwing at their shareholders. Since Trump signed the tax bill into law on Dec. 22, companies have announced $88 billion worth of stock buybacks, according to an analysis by the stock market research firm Birinyi Associates. That’s more than twice the amount of share repurchases firms announced during the same period last year.
“An analysis by Americans for Tax Fairness, a group that opposed the tax bill, put the stock buyback total at $100 billion since the Senate passed the bill in early December. Senate Democrats arrived at a similar tally for just this year.
“’Even as corporations plough tens of billions of dollars into share buybacks and stock repurchasing programs instead of raising wages or hiring more workers, President Trump and Congressional Republicans are doing their best to portray their $1.5 trillion corporate giveaway as a boost to working Americans,” Senate Minority Leader Chuck Schumer (D-N.Y.) said on the Senate floor this week.
“Stock buybacks inflate the value of a company’s shares by reducing the amount of stock available to the public. Cash devoted to repurchasing shares isn’t invested in research or development, and goosing share values lines executives’ pockets, since they are often paid with stock and receive bonuses according to its value.
Before the tax bill became law, the official Republican argument was that workers would benefit from corporate tax cuts in the long run. Companies would use their newfound extra cash for capital investments that would enhance worker productivity and make employees more valuable. That might still happen someday, though Republicans have apparently set the argument aside.
“Separate from the issue of bonuses, the tax law will result in slightly larger paychecks for most workers, since firms are withholding less income tax due to the new law’s lower rates.
“The Tax Policy Center estimated that American households, on average, would have 2.2 percent more after-tax income this year, though the richest 5 percent would see the biggest benefit.”
Gary Reber Comments:
The Republican tax bill is noting more than a scheme to further concentrate wealth-creating, income-producing capital asset ownership in the present-day tiny wealthy capital ownership class, and will not significantly result in better wages for the vast majority of workers, nor stimulate significant investment in economic growth. Whatever economic growth does result will, of course, be owned by the present-day wealthy capital ownership class, with effectively no new capital owners created.
Of course, as with every bill that is introduced that further concentrates capital wealth, the bill is sold on the basis that the result will be more jobs and better wages. But the reality is that corporations continue to seek investing in foreign countries with lower wage levels and far less regulation, seeking to produce at the lowest cost. To do this they use public-private partnerships with foreign nationals, retained earnings financing (withholding earnings from the owners of the corporation), and corporate debt financing, none of which creates any new capital owners, but instead further enriches those who are already significant capital owners.
To solve this deteriorating situation for the vast majority of Americans who are facing tectonic shifts in the technologies of production whereby “machines” (all manner of non-human means to produce) are exponentially replacing the necessity for human labor, will require reforming our monetary system (see http://capitalhomestead.org/page/monetary-justice) and enacting the Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.
Both actions will strengthen our private property principles that our nation was founded upon and result in inclusive prosperity, inclusive opportunity, and inclusive economic justice, without stepping on the private property already owned by the wealthy ownership class. This is about financing our FUTURE economy that can support general affluence for EVERY child, woman, and man, wherein individual citizens universally are the owners of our productive economy.
