Tax Cuts For the Rich Don’t Create Jobs
by
John J. Dunphy
The thinking behind the Tax Cuts and Jobs Act, which was railroaded through a GOP-dominated Congress and signed into law by Donald Trump on Dec. 22, 2017, is contained in its title. The best way to create new jobs is to give generous tax cuts to corporations. These corporate giants will use this money to expand their operations, which means they’ll hire new employees.
That’s how the Tax Cuts and Jobs Act was suppose to work. Indeed, Republican politicians doggedly insist that it’s working in precisely such a manner. Those of us who prefer reality over fantasy, however, know they’re lying. Corporate America used those tax cuts to line its own pockets, while giving many of their workers the ax.
AT&T lobbied hard for passage of the Tax Cuts and Jobs Act. This communications megapower promised that it would use this money to create good-paying new jobs. The Communication Workers of America states that AT&T “eliminated 23,328 jobs since the Tax Cuts and Jobs Act passed.” That number includes “nearly 6,000 in the first quarter of 2019.” American voters should be delighted to learn, however, that the $21 billion windfall AT&T received from this bill allowed it to boost the pay of its executives.
Del Monte didn’t create new jobs with its tax cut windfall. Instead, it will close its plant in Sleepy Eye, Minnesota, which will put 69 full-time employees and hundreds of seasonal employees out of work. Del Monte is also closing its plant in Mendota, IL, which means unemployment for 111 full-time employees and 362 seasonal workers. It’s selling off its manufacturing assets in Cambria, WI and Crystal City, TX, which will put over 400 persons out of work.
U.S. Steel reaped $728 million from Trump’s tax cuts. However, that didn’t translate into any kind of hiring frenzy. Business Insider reports that this corporate giant is laying off 200 workers at its Great Lakes Works facility in Ecorse, MI.
Lowe’s also benefited mightily from the Tax Cuts and Jobs Act. Lowe’s paid $2.04 billion in income taxes in 2018. The corporation’s income taxes for the 12 months ending July 31, 2019 were just $1.08 billion. Lowe’s used its tax break money to buy back its own stock — not to create more jobs. In fact, Lowe’s has announced that it will be cutting jobs. Grit Post reported that “Lowe’s will be eliminating positions not involved with sales.”
Rather than hiring more employees, Verizon announced in late 2018 that it would eliminate 10,400 positions as part of its “voluntary separation” program. The communications giant saved up to $4 billion as a result of Trump’s tax cuts. Verizon is hardly hurting financially, According to reports filed with the Securities and Exchange Commission, it paid its top five executives approximately $54 million in total compensation in 2017.
Union Pacific received a $6 billion tax break, courtesy of Trump and the GOP. According to a 2018 report in Grit Post, it eliminated almost 800 jobs.
Those tax cuts were a GOP scam. “The bulk of the $150 billion the tax cut put into the hands of corporations in 2018 went into shareholder dividends and stock buy-backs, both of which line the pockets of the 10% of Americans who own 84% of the stocks,” according to The Guardian. Just 6 percent of the tax savings were spent on workers.
Who really benefited from the Tax Cuts and Jobs Acts? Donald Trump provided a blunt and — at least, for him — surprisingly honest answer to that question just hours after signing this bill. The Donald was once again at the Mar-a-Lago Club, a resort where the initiation fee runs $200,000 and annual dues cost $14,000. While dining with his wealthy friends, Trump gleefully told them, “You all just got a lot richer.”
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John J. Dunphy’s books include Abolitionism and the Civil War in Southwestern Illinois and Unsung Heroes of the Dachau Trials: The Investigative Work of the U.S. Army 7708 War Crimes Group, 1945–1947. He owns The Second Reading Book Shop in Alton, Illinois.