(Photo: AP/Susan Walsh) President Donald Trump speaks at a campaign-style rally at the Pensacola Bay Center, in Pensacola, Fla., Friday, Dec. 8, 2017. T his holiday season, President Trump is doling out lumps of coal for workers (and not the clean kind either). In his first year as president, Trump appointed two new members on the National Labor Relations Board, giving the board its first pro-business majority in eight years. By the end of September the Senate had confirmed the appointments of Marvin Kaplan, a Republican lawyer, and William Emmanuel, a corporate labor lawyer. However, nobody expected the new board to take much action until after the NLRB’s Chairman, Philip A. Miscimarra, retired in mid-December and Trump replaced him. But Trump’s federal labor agency pulled off a Christmas miracle. As all eyes were on the fate of the Republicans’ $1.5 trillion tax cut package and Miscimarra on his way out the door on Saturday, the board released a flurry of decisions within 48 hours...
(Photo: AP/Alex Brandon) Treasury Secretary Steve Mnuchin is seated during a ceremony to swear in Joseph M. Otting as Comptroller of the Currency, at the Treasury Department, Monday, Nov. 27, 2017 in Washington. T reasury Secretary Steve Mnuchin has claimed from Day One that the Trump tax cuts will pay for themselves with a healthy dose of economic growth. “Not only will this tax plan pay for itself, but it will pay down debt,” he said in September. For almost as long, he has promised that his tax analysts would produce a detailed analysis that backed up that claim. Mnuchin said he had more than 100 analysts working on the report, which would be released before Congress voted. But as the tax bill was unveiled, details were hashed out in the House and Senate, and votes took place, tax wonks questioned whether the report would ever come out. As it turns out, The New York Times found out that nobody in the Treasury’s Office of Tax Policy—which is in charge of economic forecasting—was...
(AP Photo/Susan Walsh) President Donald Trump speaks at a campaign-style rally at the Pensacola Bay Center, in Pensacola, Fla., Friday, Dec. 8, 2017. T he historic ten-story Nabisco plant in Southwest Chicago had long been a point of pride—and a source of good-paying union jobs—in the Windy City, thanks to its production of one of America’s favorite cookies: Oreos. The good feelings went both ways. In 1993, Nabisco received $90 million in tax subsidies from Chicago and Illinois to invest in upgrading and expanding its production capabilities for snacks like Oreos, Ritz crackers, and Fig Newtons. More than 20 years later, in the spring of 2015, rumors were circulating at the 1,200-employee plant that Nabisco’s parent company, Mondélez International, might once again invest more than $100 million to modernize the Chicago plant and add new production lines. That July, however, management announced that the company would instead be investing that money to expand operations at a new $500...
(Photo: AP/J. Scott Applewhite) Sen. Deb Fischer, R-Neb., accompanied by Senate Minority Leader Mitch McConnell of Ky., talks during a 2014 news conference on Capitol Hill in Washington. I t’s admittedly hard to keep track of all the various moving parts and rotten eggs hidden throughout the Senate Republicans’ pernicious tax cut scheme, which they jammed through in the early morning hours Saturday just hours after releasing the full text—handwritten marginalia and all. One particular part that hasn’t received all that much attention is a paid family leave tax credit for companies that provide at least two weeks of paid parental leave. Ostensibly as a means for encouraging the expansion of paid family leave, employers would receive a tax credit for 12.5 percent of the employees’ pay if they pay those workers 50 percent of their wages. Alternatively, employers would get a 25 percent credit if they pay their workers 100 percent of their wages on leave. The period of the leave would last...
It’s becoming increasingly clear that the Republican tax scheme is going to pass. And already, corporate executives are undermining the GOP’s claim that their gigantic corporate tax cuts will be funneled directly into job-creating investments in the United States.
Some of the country’s largest and most profitable companies are saying that they’ll be sending tax savings straight to the shareholders. Pfizer, Coca-Cola, and IT giant Cisco have all said that they intend to reward shareholders with increased dividends and lucrative share buybacks, Bloomberg reported Wednesday.
“We’ll be able to get much more aggressive on the share buyback,” once the tax plan is passed, Cisco CFO Kelly Kramer told Bloomberg.
Of course, this shouldn’t surprise anyone. The Trump administration and GOP leaders have been going on and on about how their tax cuts and the tax repatriation holiday that allows companies to bring their trillions in offshore cash back at a bargain rate will spur unprecedented rates of economic growth and job creation.
But CEOs have been telegraphing their true intentions for a long time.
On an earnings call a year ago, Cisco, which has $58 billion stashed abroad, was already talking about how corporate tax cuts would allow the company to hand out buybacks and ramp up mergers and acquisitions, The Intercept reported in January. Hewlett Packard, with $47 billion in overseas profits, was also boasting about how any tax savings would go straight to shareholders.
The last time Republicans passed a tax holiday for overseas profits, the 15 companies that benefited most ended up cutting more than 20,000 net jobs and curtailing research investment. Instead, they pushed their cash piles into their shareholders’ pockets.
Earlier this month, at a Wall Street Journal event for corporate CEOs featuring Trump’s top economic advisor (and former Goldman Sachs executive) Gary Cohn, the moderator asked the high-powered audience: “If the tax reform bill goes through, do you plan to increase investment—your company’s investment, capital investment?”
Just a few hands went up. A flummoxed Cohn asked, “Why aren’t the other hands up?”
CEOs are so emboldened these days that they don’t even feel compelled to offer the typical obligatory bromides about job creation and investment.
The GOP tax plan is already a naked redistribution of wealth to the upper class—a ploy that will ultimately be funded on the backs of the middle and working classes. A share buyback bonanza will only further enrich those who can afford to invest in the stock market—the wealthy and upper middle class.
The modern corporate strategy is to immediately maximize profits by any means available—be it through cutting labor costs or limiting long-term investments or securing tax cuts in Congress—and then funnel those profits to the shareholders, who will reward the CEO with a hefty bonus. It is not, as Republicans would have you believe, to build new U.S. factories or lift up wages for employees.
Just listen to the CEOs.
Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.