Trump’s Tax Cuts and Jobs Act of 2017 Has So Far Been a Trickle-Down Failure, Part 2

yfp (42)in #trickledown • 6 years ago

“What did corporate America do with that tax break?" reads a June 26, 2018 NBC News article headline, referring, of course, to POTUS Donald J. Trump's Tax Cuts and Jobs Act of 2017, "Buy record amounts of its own stock” [1].

Further into the article, its readers are informed, "'More than 70 percent of this [tax cut] will be returned to workers,' said White House Press Secretary Sarah Huckabee Sanders at a January press conference after the bill came into effect,” yet 70 percent, or anything like it, never went to workers, at least so far, because “companies have instead used the extra cash to spend billions of dollars buying back their own stock, boosting the value of shares held by investors. Buybacks reduce the number of shares on the market, immediately increasing the value of the shares that investors already hold” [1].

Not long after its release, Marxist economist Dr. Richard Wolff elaborated on the article, stating, “[I]t turns out, and this is from NBC News . . . that the bulk of the money saved by the big companies who got a cut in their profits tax from 35 percent to 21 percent . . . did not go to hire more workers, it did not go to raise wages . . . Here’s what they did do: They bought back shares of stock. That’s right: A company can use the money it no longer gives Uncle Sam in taxes to go into the stock market and buy its own shares back from the private companies and the private individuals who own those shares. And you know what this does? It drives up the value of shares. And why would the executives of these companies do that? Because it turns out for many of them, their pay package depends on how well the shares do in the market, so they’re taking the money they don’t give to Uncle Sam, which therefore can’t provide us with public services, and they’re using that money to boost the values of the shares so they take home more money. . . . And guess what? The result of businesses being able to use the tax savings to boost their share prices is to make the rich richer and the rest of us not so much” [2].

In summary, the U.S. working class is not seeing trickle-down benefits as a result of Trump’s Tax Cuts and Jobs Act of 2017 because the capitalists’ tax savings from it are being used elsewhere, presumably for mere profit's sake.