SOTU FACT CHECK: PRESIDENT TRUMP’S TAX SCAM TARGETS TAX CUTS TO THE WEALTHIEST AND TO LARGE CORPORATIONS
DESPITE TRUMP CLAIMS, ECONOMISTS AND ANALYSTS DON'T EXPECT BUSINESS TAX CUTS TO LEAD TO SIGNIFICANT JOB GROWTH OR WAGE GROWTH
Only 2 percent of U.S. adults said they had gotten a raise, bonus or other additional benefits due to the Republican tax scam, according to a new Reuters/Ipsos poll
Moody's Investors Service: GOP tax bill will not create meaningful boost to business investment: "We do not expect a meaningful boost to business investment [from the GOP tax bill] because U.S. nonfinancial companies will likely prioritize share buybacks, M&A [mergers and acquisitions], and paying down existing debt … Much of the tax cut for individual will go to high earners, who are less likely to spend it on current consumption."
Bloomberg: Trump's tax promises undercut by CEO plans to reward investors. "Major companies including Cisco, Pfizer and Coca-Coal say they'll turn over most gains from proposed corporate tax cuts to their shareholders, undercutting President Trump's promise that his plan will create jobs and boost wages for the middle class." [11/29/17]
New York Times: Goldman Sachs doubts GOP tax cut bill will have an impact on wages. "Many economists are skeptical that the tax cut will have a meaningful impact on wages. In an economic research memo released on Thursday, Goldman Sachs wrote that ‘we expect no significant short-term effect of tax reform on' average hourly earnings." [1/11/18]
Morgan Stanley: Wall Street analysts estimate vast majority of companies will not spend their tax savings on raising employee compensation. A Morgan Stanley survey of Wall Street analysts found that only 22 percent expected the companies they follow to direct at least some of their tax savings to employee compensation. By contrast, 83 percent of analysts said companies would increase share buybacks, dividends, or merger activity.
DESPITE TRUMP CLAIMS, CORPORATIONS ARE LAYING OFF WORKERS AT THE SAME TIME THEY GIVE A FEW BONUSES
Wash Post: Kimberly-Clark, Maker of Kleenex and Huggies, says tax bill helps fund plan that includes more than 5,000 layoffs. "Kimberly-Clark, the Dallas-based maker of Kleenex, Huggies, Kotex and other consumer products, plans to use some of its windfall [from the GOP tax bill] to cover the costs of shrinking its workforce by as much as 13 percent as it shutters factories and reorganizes operations. Chief Financial Officer Maria Henry said the company's gains from the tax overhaul would help offset the cost of the restructuring." [1/23/18]
Reuters: Walmart hikes minimum wage, announces layoffs on same day. Walmart on Thursday said it will raise entry-level wages for U.S. hourly employees to $11 an hour in February as it benefits from last month's major corporate tax cut and on the same day said it will shut stores and lay off thousands of workers. The world's largest retailer and private employer … will shutter 63 of its Sam's Club discount warehouses, or about one tenth of the chain overall." [1/11/18]
Newsweek: AT&T Announces Thousands of Layoffs, Firings Just in Time for Christmas. "AT&T plans to lay off and fire more than a thousand workers starting early next year, according to local reports. Across the Midwest, an estimated 600 workers were notified they were being laid off by the company on December 16, a week before AT&T announced it was doling out $1,000 bonuses to 200,000 employees… The announcement came days after the New York Post reported that the company ‘pink-slipped more than 700 DirecTV home installers.'" [12/24/17]
Los Angeles Times: Pfizer, pocketing a big tax cut from Trump, will end investment in Alzheimer's and Parkinson's research. "The big drug company Pfizer seems intent on being a pace-setter in cranking out the benefits of the tax cut to stakeholders who need them the least. In an announcement over the weekend, Pfizer said it was shutting down its research efforts on treatments for Alzheimer's and Parkinsonism. The company didn't say how much it was spending on the two conditions, but said about 300 researchers will lose their jobs as it redirects its research and development elsewhere." [1/8/18]
BENEFITS OF PRESIDENT TRUMP'S TAX SCAM ARE TARGETED TO THE WEALTHIEST AND TO LARGE CORPORATIONS
President Trump claims that the primary focus of the Tax Scam bill was to provide massive tax relief to the middle class. But nothing could be further from the truth. The facts show that the tax scam is a monumental theft from the middle class to enrich the wealthiest 1 percent. Republicans have sold the future of workers, seniors and the middle class to pad the pockets of big corporations.
- Gives 83 Percent of the Tax Cuts to the Wealthiest 1 Percent: The nonpartisan Tax Policy Center determined that the GOP tax bill provides 83 percent of the tax cuts to the wealthiest 1 percent, putting corporations and the richest ahead of everyone else.
- Raises Taxes on 86 Middle Class Families: The GOP tax scam's meager, temporary benefits for the middle class evaporate in a few years, and the scam ultimately raises taxes on 86 million middle class families, according to the nonpartisan Tax Policy Center.
- Provides A $1.3 Trillion Tax Rate Break for Corporations: Instead of simplifying the tax code or making it fairer, the GOP tax scam handed permanent tax breaks to big corporations, rewarded corporations shipping jobs overseas, and added even more loopholes for special interests to exploit.
- Explodes Debt by At Least $1.8 Trillion, Targets Medicare and Medicaid: Republicans have stuck our children with the bill for their debt-exploding giveaways to the wealthiest, and will use the debt they created to justify ransacking the future of Medicare, Medicaid, education, veterans, and working families.
Brookings Institution: The new tax plan is the worst Christmas present for the middle class. "The Republican Party has achieved something nobody thought possible. They have taken the broken, regressive, loophole-ridden US tax code, and made it worse. …This bill offers the working class and middle class little or nothing – crumbs from the table at best. It provides a huge boon, however, to corporations and to the wealthy. This is not a populist tax bill. It is a plutocrat one." [12/19/17]
The Atlantic: Why the GOP tax cut will make wealth inequality so much worse. "Within a week, Republicans will probably pass a tax cut that is one of the most unpopular pieces of legislation in modern American history. … How can a trillion-dollar tax cut be so unpopular? …Most Americans seem to think that the GOP tax bill overwhelmingly benefits the rich at a moment when large corporations and affluent families don't need much legislative assistance in their multi-decade dominion over the economy. In fact, the GOP tax bill does just that." [12/19/17]
Slate: Republicans now plan to pass permanent tax cuts for corporations and temporary tax cuts for everybody else. "The latest version of the Senate tax plan can more or less be summed up in 10 words: temporary tax cuts for families. Permanent tax cuts for corporations. .. It's sort of a tax version of Cinderella. When the clock strikes midnight on Jan. 1, 2026, the GOP's much touted middle-class tax cuts transform into tax hikes. " [11/15/17]
CBPP: JCT Estimates: Final GOP Tax Bill Skewed to Top, Hurts Many Low- and Middle-Income Americans: "The final tax bill .. provides by far the largest benefits to high-income people, and many middle- and lower-income households would end up worse off. Under the amended bill, in 2025, …, high-income households would get the largest tax cuts as a share of after-tax income, on average, while households with incomes below $30,000 would on average face a tax increase." [12/19/17]
New York Magazine: National Economic Council Director Gary Cohn: "The most excited group out there are big CEOs, about our tax plan." "In a new interview John Harwood, Gary Cohn is forced into a series of admissions he probably should not be making. Cohn: ‘The most excited group out there are big CEOs, about our tax plan.'" [11/9/17]