(Third & State – by Diana Polson) December 17th marked the one-year anniversary of President Trump’s “Tax Cut and Jobs Act.” While we knew the impact of this legislation would mean more money shifting upwards into the hands of the already wealthy and large corporations, we have new data, thanks to the Americans for Tax Fairness, corroborating that reality.
And surprise! Contrary to the lies the Trump White House and backing Republicans sold the American people prior to the passage of this legislation, the money has not gone to workers or the middle class.
President Trump said the average American would receive a $4,000 pay raise as a result of this legislation. One year out, only 4.4% of workers received a bonus or wage hike, with only 413 out of 5.9 million employers passing the tax cuts down to their employees. See on the pie chart below the slice of blue representing the 413 companies that passed the tax cut down to workers? Neither do I. The fact of the matter is hardly any of the tax cuts were passed down.
The Economic Policy Institute showed that cash bonuses gave workers only a 2 cent increase in hourly compensation, adjusted for inflation. Corporations are getting 11 times as much in tax cuts as they are giving away in bonuses or wage hikes.
Not only that, job cuts have also occurred. Nearly 225,000 private sector job cuts have been announced at 338 companies since the law went into effect, and this estimate is low since some companies did not quantify their job cuts (like Amazon and Wells Fargo).
So, what are companies doing with the money? Money from the tax cut is actually going to stock buybacks, which puts money back into the hands of the wealthy. In fact, corporations across the US spent 128 times as much on buying back stock than they spent on workers’ bonuses and wage increases—$906 billion has been spent on stock buybacks since the law was passed while only $7.1 billion has been spent on wage hikes/bonuses.
This legislation has not boosted wages for the average American—it has, in fact, put more money into the hands of corporations and the already rich, worsening income inequality and widening the racial wealth gap. This tax cut will also increase the deficit by about $1.9 trillion in the next ten years, meaning less funding for health care, housing, infrastructure, and other vital services people rely on. Moving forward, we should change the name of the legislation from what it pretended to be: Tax Cut and Jobs Act to what it actually is: Tax Cut and [Con] Jobs Act.