Four months after Republicans in Congress passed the largest tax code overhaul in three decades, American corporations have gotten a huge tax cut.
New analysis from Americans for Tax Fairness, however, suggests these corporations aren’t using their recently freed up cash to help middle class workers like the administration said it would — more than 84 times.
The organization analyzed corporate data from primarily Fortune 500 companies, whose revenues are two-thirds of the entire gross domestic product (GDP), in addition to news reports and independent analyses of top U.S. companies. What they found was that these powerful corporations have spent a total of roughly $238,244,348,330 in stock buybacks since December 20, 2017 when the tax bill passed.
Working class Americans won’t see a penny of that.
Stock buybacks help those who own corporate stock, which typically means the already-rich. The wealthiest 10 percent of American households own 84 percent of all shares, while the top 1 percent own 40 percen. Roughly one-half of American households don’t own stock at all.
According to the data, few corporations have decided to use the savings from the tax bill to benefit their workers directly. Out of the over 1,500 companies from which Americans for Tax Fairness collected data, just 359 of them actually promised to increase wages for their employees. Of those that have, the majority only offered a bump of $15 an hour in entry-level pay — which, by all accounts, should already be what companies pay entry-level employees in a tightening labor market.
And those one-time tax bill bonuses corporations gave out to employees? Those represent just a just small fraction of what the $1.4 trillion dollar tax bill costs. A ThinkProgress analysis of the bonuses, originally compiled by Americans for Tax Reform, found that they total roughly $981 million — only .09 percent of the total cost of the corporate tax cut.
Overall, only 2 percent of Americans have reported getting a raise or bonus as a result of the tax bill.
In hindsight, this kind of data isn’t surprising, given that CEOs were openly admitting to journalists that they planned to spend their tax windfall on everything but their workers.
“Is it our goal to increase return to our shareholders and do we have an excess amount of capital? The answer to both is, yes,” Wells Fargo CEO Tim Sloan told CNN Money on December 18, one day prior to the tax bill’s passage. “So our expectation should be that we will continue to increase our dividend and our share buybacks next year and the year after that and the year after that.”
White House chief economic adviser Gary Cohn also attended a Wall Street Journal event in November, where CEOs were asked whether their companies planned to invest more in their workforce if the tax reform bill passed. Very few hands went up.
Corporations and the ultra-wealthy are not the only ones who will be seeing huge returns as a result of the GOP tax bill: according to a new report from the Center For American Progress Action Fund (ThinkProgress is an editorially independent news site housed at CAPAF), 15 Republicans from tax writing committees in Congress will also receive an average tax windfall of $314,000 from the legislation they helped craft.