Last fall, shortly after Thanksgiving, Sen. Susan Collins (R-Maine) was clearly aware of the criticisms of her party’s regressive tax plan, but she was eager to defend it anyway, insisting that the plan would be implemented effectively. “The purpose of lowering the corporate rate is to encourage job creation here,” Collins argued at the time. “It is not to encourage stock buybacks.”
Right after Republicans in Congress passed their tax bill, lowering tax rates on corporations, companies delivered a very public thank-you: a series of bonus and investment announcements. It was a major PR opportunity for both corporate America and the GOP, meant to show that American businesses were sharing their billions of dollars in tax cut savings with their workers and the broader economy.
But over the next few months, the real winners from the corporate tax cut became clear – not workers and consumers, but shareholders. Companies have boosted dividends and stock buybacks.
To borrow Collins’ phrasing, this may not have been the intended “purpose” of giant corporate tax breaks, but as Vox’s report makes clear, it’s become the result – just as many Democratic critics of the Republican plan predicted.
There’s plenty of related evidence to bolster the point. Business Insider reported yesterday, for example, “A new survey published by the Federal Reserve Bank of Atlanta in conjunction with Stanford University and University of Chicago Booth School economists shows [the measures in the new Republican tax plan] have done little to bolster corporate investment plans.”
As for the public, a CNBC poll, released yesterday, found that a majority of Americans have seen “no change in their paychecks” as a result of the new tax cuts.
Some, however, have reason to be pleased: the Wall Street Journal reported this week that the average banker bonus in New York City “was $184,220 last year, the biggest annual haul for Wall Street employees since before the financial crisis.”
Note, that $184,220 figure isn’t the salary; that’s just the average size of the bonus for New York bankers.
After seeing a report like that, it’s hard not to think of House Speaker Paul Ryan and his recent boast about that secretary in Pennsylvania who’s now getting an extra $1.50 per week thanks to the Republican plan.