Three months after President Trump signed the Republican tax law, how’s it working out for you? It all depends on whether you work on Wall Street—which got $1 trillion in tax breaks for big business and the wealthy—or in Wisconsin, where working people are facing plant closings and pink slips.
Two lawmakers from Wisconsin stand on two sides of the debate. Republican House Speaker Paul Ryan insists, “This gets us better wages, bigger paychecks.” But Democratic Senator Tammy Baldwin is cracking down on stock buybacks which swell CEOs’ stock portfolios while squeezing workers’ jobs and paychecks.
Buybacks, No Bonuses. Respected financial analysts agree that Wall Street is getting the gold mine, while workers are getting the shaft. The metrics may differ, but the message is the same:
- Bloomberg found that shareholders are enjoying 60 percent of the tax-cut gains, while workers are getting only 15 percent.
- Morgan Stanley reports that 43 percent of their tax savings are going to stock buybacks and dividends, while only 13 percent to workers’ raises, bonuses, and benefits.
- In an analysis of 121 Russell 1,000 companies, Just Capital found that shareholders are getting 57 percent of tax savings, while 20 percent is going to job creation and 6 percent to current workers.
- In fact, share buybacks are averaging $4.8 billion a day this year.
Kleenex Maker Wipes Out Jobs. Racking up $3.3 billion in profits last year and bragging that “we returned $2.3 billion to shareholders through dividends and share repurchases,” Kimberly-Clark is laying off as many as 5,500 workers, while closing or selling 10 plants globally. Many of these employees live near and work at the company’s plant in Fox Crossing, Wisconsin.
No More Buyouts and Broken Lives. Concerned about human tragedies like these layoffs, Senator Baldwin has introduced a bill to prohibit companies from buying back their shares on the open market.
- Co-sponsored with Democratic Senators Elizabeth Warren of Massachusetts and Brian Schatz of Hawaii, the bill would also repeal a 1982 rule by the Securities and Exchange Commission allowing companies to buy back immense amounts of their own stock.