Pay raises of at least $4,000.
That’s what President Trump promises from his “tax reform,” with $2 trillion in corporate windfalls.
But cutting corporate taxes rates from 35 to 20 percent doesn’t mean companies will create jobs and raise wages.
Major corporations, including Coca Cola, Cisco Systems, and Pfizer say they’ll use their tax savings to increase dividends, not raise wages, as Bank of America Merrill Lynch learned in a survey of 300 companies.
When Trump’s chief economic adviser, Gary Cohn addressed the Wall Street Journal’s CEO Council, the moderator asked who’d reinvest their tax cuts. Few CEOs agreed. “Why aren’t the other hands up?” Cohn asked.
The Communications Workers of America union asked eight companies employing hundreds of thousands of CWA members if they’d agree to raise wages by $4,000 with their tax bonus. None said yes.
With profits soaring, companies have a record $1.84 trillion on hand. But they’re reluctant to reinvest because they need more customers, not more cash.
That’s why the greatest productivity and wages gains came after World War II. America invested in people and infrastructure, paid for by higher taxes than today on corporations and the rich. Workers had more money to spend. And the economy thrived.