Saturday, February 10, 2018

Only 13% of Corporate Tax Cuts Going to Workers

Businesses are going to spend their big tax cut savings on investors, new equipment, getting out of debt and buying other companies. Oh, and workers. Employees will get a tiny piece, too. A very tiny piece. Only 13% of companies' tax cut savings will go to pay raises, bonuses and employee benefits, according to a survey of Morgan Stanley analysts released Thursday. 43% will go to investors in the form of stock buybacks and dividends, the analysts predict.

More

Critics of the Republican tax cut have argued that investors will reap the benefits, and companies will hardly reward their employees -- if at all.

Many businesses have announced splashy tax cut gifts for their workers, including raises, better benefits and big one-time bonus checks. As of Monday, more than 300 companies have announced tax-cut-related bonuses and raises, benefiting 3.5 million U.S. workers, according to the White House.

Even if the middle class does benefit from corporate tax cuts down the road, those benefits may not be as great or as immediate as the White House promised.

Economists and tax policy experts agree that corporate taxes can hurt workers. The more tax companies pay, the less money they have to create jobs and pay workers.

Exactly how much taxes hurt workers is a matter of debate.

And even if workers do end up benefiting, those benefits might not last. The economy could enter a recession, and companies could rein in their payrolls.

Comments

So I guess trickle down works...technically?

#1 | Posted by jpw at 2018-02-09 03:37 PM

Only 13% of business' tax cuts are going to workers

I was saying this very same thing ...

www.drudge.com

The 30-minute video in my thread is still there and well worth the time.

#2 | Posted by PinchALoaf at 2018-02-09 04:02 PM

The business tax cuts were made that [1] fewer companies would chose to relocate overseas [and maybe some who have relocated may return, [2] make our companies more competitive with foreign ones producing the same type goods and services, and [3] encourage the return of the hundreds of billions made and kept overseas to avoid prohibitive taxation. bonuses/raises for employees, etc for employees were never the main reason for the cuts. At this point and time it appears that the cuts may be accomplishing what they were designed to do.

#3 | Posted by MSgt at 2018-02-09 04:32 PM

#3 Not true. This bill favors off-shoring. We should expect more investment overseas.

#4 | Posted by BruceBanner at 2018-02-09 05:30 PM

Trickle down obviously doesn't work. This is not good.

#5 | Posted by BruceBanner at 2018-02-09 06:12 PM

#3 I bet you believed Trump was going to pay more taxes too.

#6 | Posted by 726 at 2018-02-10 07:46 AM

13% more than the workers deserve!

#7 | Posted by snoofy at 2018-02-10 09:28 PM

It's not like the value of their labor went up just because the company got a tax cut....

#8 | Posted by snoofy at 2018-02-10 09:28 PM

But the value of the CEOs did? They are getting double digit raises and bonuses again this year.

Tell us all what Thomas Rutledge did that is worth $98 million last year. Be specific.

#9 | Posted by hatter5183 at 2018-02-11 01:32 AM

I bet when it's all said or done that 13% will morph into less than 1%.

#10 | Posted by aborted_monson at 2018-02-11 02:14 AM

The only reason 13% is going to "workers" is because high paid executives are considered "workers." None of those tax cuts are actually going to workers, the only increases in pay will not be brought about by tax cuts because tax cuts are on profits. Increases in pay will only come from demand for labor. Economics 101, higher taxes make higher wages happen, lower taxes removes the incentive to raise wages. The stupidity of the American electorate is incredible.

"The business tax cuts were made that [1] fewer companies would chose to relocate overseas [and maybe some who have relocated may return, [2] make our companies more competitive with foreign ones producing the same type goods and services, and [3] encourage the return of the hundreds of billions made and kept overseas to avoid prohibitive taxation."

They won't relocate overseas now that they won't owe corporate taxes on profits earned overseas? That's stupid.

Realize, your entire post was a talking point made up by the Republicans to defend the give away, and the irresponsibility of the richest Americans who just gained 1.5 trillion dollars that the rest of us will have to pay back or continue to pay interest on. You're a joke who thinks they are smart.
Our companies will be more competitive with foreign ones producing the same goods and services who pay their employees $1.00 an hour? That's incredibly stupid.
It will encourage the return of hundreds of billions made and kept overseas to avoit prohibitive taxation? Define prohibitive and gosh darn it, those billionaires really did need a break. You are an idiot!

#11 | Posted by danni at 2018-02-11 08:32 AM

Only 13% of Corporate Tax Cuts Going to Workers

Hedrick Smith has been allover this ...

reclaimtheamericandream.org

One basic reason for the shared prosperity of the postwar era was that the gains in American economic growth and efficiency got passed through to average Americans.

From 1945 to 1975, the productivity of the American workforce roughly doubled. Productivity rose nearly 97% and the median hourly wage and benefits went up 91%. In short, the rising tide was truly lifting all boats.

In that era, CEOs of America's corporations did not pay themselves vast sums of company stock, as they do today. That was frowned upon as unethical insider trading, because obviously top corporate executives have inside information on new products about to appear or other major moves on the horizon.

So the annual salary of business leaders such as Charlie Wilson, then CEO of General Motors, was equal to $5 million in today's money, low pay by modern standards. Wilson made about 30-40 times the annual salary of an average autoworker, far below the ratios of 250-1 or 300-1 seen today...

The contrast between what business does today and what it used to do is stunning.

In a study of hundreds of major U.S. companies, tellingly titled "Profits Without Prosperity," Lazonick found that in the late 1970s and early ‘80s, major U.S. companies ploughed close to half of their profits into expanding their businesses, funding R&D, retraining workers and paying them more, and paid out the other half of profits to shareholders.

But from 2003 to 2012, Lazonick found, shareholders got 91% of corporate profits and growth got only 9%.

That is a disastrous ratio the American economy.


So when people chime in with occasional anecdotes about pay raises and bonuses now that the GOP Tax Cuts are law, it's mostly PR -- the big picture of how corporations have continually taken trillions in profits to pay CEO's and shareholders and very minimally passed on to workers is never mentioned.

#12 | Posted by PinchALoaf at 2018-02-11 09:58 AM


How Much Trump's Tax Cuts Are Trickling Down
www.bloomberg.com

...One thing's pretty certain: This is a good moment for workers. A tight labor market has pushed unemployment to historic lows and many economists see wage gains just around the corner. On top of that comes the big tax cut, which may encourage more companies to pass some of the savings onto employees, instead of simply reward shareholders.

"If the unemployment rate were 8 or 10 percent, you wouldn't be seeing a lot of these announcements," said Stephen Stanley, chief economist at Amherst Pierpont Securities. Companies would still be investing in their businesses, but the "wage piece of it is probably driven primarily by the labor market."

Of course, the benefits aren't exactly raining down and most say it's too early to tell if any of this will give a meaningful boost to growth. But for some, the trickle from the top -- a classic supply-side approach championed by Republicans -- has been a little bigger than initially expected.

With corporate profits as a share of GDP close to the highest levels in 70 years and labor's share near an all-time low, some say something had to give.

Now, after the tax rewrite pushed the corporate rate down from 35 percent to 21 percent, executives may feel more compelled to share the savings, according to Goldman Sachs Group Inc. Even before the tax cut, a number of businesses like Wal-Mart were struggling to retain good help as an upswing in the economy pushed the jobless rate down to 4.1 percent....


#13 | Posted by LampLighter at 2018-02-11 11:06 AM

"It's not like the value of their labor went up just because the company got a tax cut...."

apparently it went up 13%

#14 | Posted by eberly at 2018-02-11 11:36 AM

"In a study of hundreds of major U.S. companies, tellingly titled "Profits Without Prosperity," Lazonick found that in the late 1970s and early ‘80s, major U.S. companies ploughed close to half of their profits into expanding their businesses, funding R&D, retraining workers and paying them more, and paid out the other half of profits to shareholders.

But from 2003 to 2012, Lazonick found, shareholders got 91% of corporate profits and growth got only 9%.

That is a disastrous ratio the American economy."

"disastrous"? more like "reality". we live in a global economy like never before. I don't disagree with your point about where the profits are being distributed and how it impacts the American worker.

Will a tax cut solve any problems? No. at least not a worker's problems.

#15 | Posted by eberly at 2018-02-11 11:41 AM

"Now, after the tax rewrite pushed the corporate rate down from 35 percent to 21 percent, executives may feel more compelled to share the savings, according to Goldman Sachs Group Inc. Even before the tax cut, a number of businesses like Wal-Mart were struggling to retain good help as an upswing in the economy pushed the jobless rate down to 4.1 percent...."

Horse crap. Businesses pay what they need to pay to keep the help they need. The Walton family profited in the billions for years, their profits, their taxes have nothing to do with how much they pay their help. They pay their help as little as they can and still keep them. The tax cut benefited the owners but very little of it will benefit the workers, the greedy will just put more wealth away. Sam Walton would be ashamed of his greedy kids.

#16 | Posted by danni at 2018-02-11 01:15 PM

"It's not like the value of their labor went up just because the company got a tax cut...."
apparently it went up 13%
#14 | POSTED BY EBERLY

You're funny.

#17 | Posted by snoofy at 2018-02-11 01:23 PM

Will a tax cut solve any problems? No. at least not a worker's problems.

#15 | POSTED BY EBERLY

Not cutting taxes for corporations already making record profits is just one part, of multiple parts, to fixing the problem.

And speaking of the tax code, re-write it so it benefits We The People and not just a small group of douchebag GOP billionaire campaign donors.

#18 | Posted by PinchALoaf at 2018-02-11 05:32 PM

"And speaking of the tax code, re-write it so it benefits We The People and not just a small group of douchebag GOP billionaire campaign donors."

Have you ever taken an economics class?

There is no logical reason why one should expect a tax cuts to incentivize employers to pay more for labor...or any other factor of production for that matter. They're not going to pay more for their electricity, or water, or internet, or any other goods and services needed to maintain continuing operations. Why would you think they would pay more for labor?

#19 | Posted by madbomber at 2018-02-11 06:12 PM

Why would you think they would pay more for labor?

#19 | POSTED BY MADBOMBER

Why do you think re-writing the tax code automatically means tax cuts?

How the nation's revenue is generated, spent, invested, set-aside ... combined with who pays, who gets taxed, whose taxes are cut ... combined with regulatory measures keeping everything and everyone honest with the necessary checks and balances ...

That's what I'm getting at when I say re-writing the tax code so it benefits We The People.

#20 | Posted by PinchALoaf at 2018-02-11 06:29 PM

"That's what I'm getting at when I say re-writing the tax code so it benefits We The People."

I would submit that the revised tax-code does benefit virtually everyone in this country today who is paying taxes. But our kids...not so much. Evenutally someone is going to have to pay the bills.

#21 | Posted by madbomber at 2018-02-11 06:36 PM

I would submit that the revised tax-code does benefit virtually everyone in this country today who is paying taxes

If you define "benefit" solely in terms of dollars, that might be true. Even in the short term, programs will be cut to pay for this $1,500,000,000,000.00 hole in the budget, and people who get an extra $1.50/week from Paul Ryan won't be "benefiting" so much when their infrastructure crumbles and everything else the fed touches is forced into austerity to pay for tax cuts.

#22 | Posted by JOE at 2018-02-11 06:43 PM

"I would submit that the revised tax-code does benefit virtually everyone in this country today who is paying taxes."

Great.
Submit how much it helps, stratified by income or wealth or something meaningful.

#23 | Posted by snoofy at 2018-02-11 06:58 PM

"I would submit that the revised tax-code does benefit virtually everyone in this country today who is paying taxes."

In return for an additional $11,000 in per person debt, 82% of it going to the wealthiest???

Still a benefit, or merely a short-term gain for a lousy long-term deal?

#24 | Posted by Danforth at 2018-02-11 07:20 PM

"In return for an additional $11,000 in per person debt, 82% of it going to the wealthiest???"

You can rest easy knowing that a relatively small number of taxpayers will foot the bill for most of those people.

"Still a benefit, or merely a short-term gain for a lousy long-term deal?"

It will be a ------ deal for my two young daughters, given that they're almost certainly going to be taxpayers someday.

#25 | Posted by madbomber at 2018-02-11 07:38 PM

You can rest easy knowing that a relatively small number of taxpayers will foot the bill for most of those people.

#25 | POSTED BY MADBOMBER

Then why will taxes eventally go up for people like me and you with the Trump/GOP Tax Cuts?

Respectfully, that's what should bother YOU as it relates your children when it comes to education, healthcare, infrastructure, and the environment.

#26 | Posted by PinchALoaf at 2018-02-11 08:02 PM

#11 | POSTED BY DANNI AT 2018-02-11 08:32 AM | FLAG: I never realized b before that you appear to have a reading comprehension problem. Try once more to read what I posted without trying to 'read between the lines'. Also recommend that a course in ECON 101 would be be beneficial.

#27 | Posted by MSgt at 2018-02-12 01:03 AM

You can rest easy knowing that a relatively small number of taxpayers will foot the bill for most of those people.

--------.

The 1% reaps the benefits of this "reform" - giveaway.

Everyone foots the bill with:

Less education funding.
Crumbling roads and bridges.
Longer wait times at social security offices.
Less health care.
Less public libraries.
Less college assistance.

#28 | Posted by 726 at 2018-02-12 06:51 AM

When you have to buy new tires and shocks for your car because we didn't fix roads with the tax dollars we CHOSE not to collect, you are paying the bill

When you pay higher insurance premiums to cover the profit margin private insurance companies CHOOSE to inflate costs by because we CHOSE not to spend money on universal health care you are paying the bill

When your water bill triples so the new treatment plant can filter chemicals it never had to worry about before you are paying the bill

#29 | Posted by hatter5183 at 2018-02-12 12:40 PM

100% of personal Tax cuts are going to workers!

#30 | Posted by Federalist at 2018-02-12 04:38 PM

Well at least those who pay Taxes.

#31 | Posted by Federalist at 2018-02-12 04:39 PM

Federalist, is the glass 13% full or 87% empty?

#32 | Posted by snoofy at 2018-02-12 04:42 PM

#29 | Posted by hatter5183
When your auto insurance rates go up to pay for illegal aliens you pay.

#33 | Posted by Federalist at 2018-02-12 04:42 PM

#32 | Posted by snoofy
Your glass or mine?

#34 | Posted by Federalist at 2018-02-12 04:43 PM

Oh and 13% as you claim is 13% more than they had.

#35 | Posted by Federalist at 2018-02-12 04:45 PM

What did the workers do to deserve a bonus, Federalist?

#36 | Posted by snoofy at 2018-02-12 04:48 PM

#36 | Posted by snoofy
What did the workers do to deserve a bonus, Federalist?

What? It was their money to begin with! Taken strong handily by the U.S. Government.

I don't call them Tax Cuts, I call the stealing less of what workers earned.

#37 | Posted by Federalist at 2018-02-12 04:52 PM

"It was their money to begin with!" - #37 | Posted by Federalist at 2018-02-12 04:52 PM

The workers paid themselves a bonus?

How exactly does that work?

#38 | Posted by Hans at 2018-02-12 04:55 PM

"What? It was their money to begin with!"

No it wasn't.

#39 | Posted by snoofy at 2018-02-12 05:03 PM

#39 | Posted by snoofy
Oh yea it was, 100% of it was their money.

#40 | Posted by Federalist at 2018-02-12 05:31 PM

Oh and by the way I think all Federal workers except for the Military should not get the Tax Cut. They do not produce anything.

#41 | Posted by Federalist at 2018-02-12 05:36 PM

"Oh yea it was, 100% of it was their money."

No, it really isn't.

It's a corporate tax cut, not a payroll or income tax cut.

100% of the money belongs to the corporation.

#42 | Posted by snoofy at 2018-02-12 05:45 PM

And... what exactly does the military produce?

#43 | Posted by snoofy at 2018-02-12 05:50 PM

That is a lot more than they got under o'bummer. What's your point?

#44 | Posted by Sniper at 2018-02-12 05:52 PM

And... what exactly does the military produce?

#43 | Posted by snoofy

I didn't think you could ever figure it out.

They produce the freedom you don't seem to enjoy along with many jumps in technology.

#45 | Posted by Sniper at 2018-02-12 05:54 PM

#3 Not true. This bill favors off-shoring. We should expect more investment overseas.

#4 | Posted by BruceBanner

You are clueless bru.

#46 | Posted by Sniper at 2018-02-12 05:55 PM

Tell us all what Thomas Rutledge did that is worth $98 million last year. Be specific.

#9 | Posted by hatter5183

Tell me what the nfl contributed to the USA to earn their billions.

#47 | Posted by Sniper at 2018-02-12 05:57 PM

And... what exactly does the military produce?

#43 | Posted by snoofy
You should join and find out.

#48 | Posted by Federalist at 2018-02-12 05:57 PM

"They produce the freedom"

What do Federal Air Traffic Controllers produce?
Do you agree with Federalist; they produce nothing?

#49 | Posted by snoofy at 2018-02-12 05:57 PM

#47 | Posted by Sniper
ZERO.

#50 | Posted by Federalist at 2018-02-12 05:59 PM

"It's not like the value of their labor went up just because the company got a tax cut...."

apparently it went up 13%

#14 | Posted by eberly

You are a bit shallow. Wages go up when there is a shortage of labor. Ever heard of the rule of supply and demand? Take apple i-phones for example. Tell me a phone is worth $1,000.

#51 | Posted by Sniper at 2018-02-12 06:00 PM

And speaking of the tax code, re-write it so it benefits We The People and not just a small group of douchebag GOP billionaire campaign donors.

#18 | Posted by PinchALoaf

Tell me you didn't get a tax cut.

#52 | Posted by Sniper at 2018-02-12 06:01 PM

"Tell me a phone is worth $1,000."

The price tag tells you that.

Clearly you're not in a position to buy a phone equal to your monthly income, but that's really on you, not the phone.

#53 | Posted by snoofy at 2018-02-12 06:02 PM

#49 | Posted by snoofy
You are correct. They produce nothing.
pro·duce
verb
verb: produce; 3rd person present: produces; past tense: produced; past participle: produced; gerund or present participle: producing
prəˈd(y)o͞os/

1.
make or manufacture from components or raw materials.

#54 | Posted by Federalist at 2018-02-12 06:02 PM

Okay, so what does the military make or manufacture from components or raw materials?

LOL you two are funny.

#55 | Posted by snoofy at 2018-02-12 06:05 PM

#53 | Posted by snoofy
More hate speech! LOL

#56 | Posted by Federalist at 2018-02-12 06:08 PM

See #45

#57 | Posted by Federalist at 2018-02-12 06:09 PM

Freedom isn't a product according to your definition of what a product is.

Or maybe you'd like to name the raw materials and tell me how they get processed into freedom...

#58 | Posted by snoofy at 2018-02-12 06:12 PM

"hate speech"

Acknowledging that many Americans get by on a fixed income is not hateful.

#59 | Posted by snoofy at 2018-02-12 06:14 PM

#58 | Posted by snoofy
See the GDP.

#60 | Posted by Federalist at 2018-02-12 06:17 PM

The military produces the GDP?

#61 | Posted by snoofy at 2018-02-12 06:20 PM

Tell me you didn't get a tax cut.

#52 | POSTED BY SNIPER

I explained FOR YEARS in the Nooner to YOU and the rest of the Nematode Brigade that Obama CUT your taxes with his 2009 Stimulus.

And you and your Knuckleheaded Nooner ------------- SWORE UP AND DOWN Obama never cut your taxes ...

Poll Reveals Most Americans Don't Know They Got a Tax Cut
www.cbsnews.com

Remember ?

REMEMBER ??

R-E-M-E-M-B-E-R ???

I've posted that CBS news link on this website, often responding to you, at least one hundred times.

Also, the Trump/GOP Tax Cut only cuts our taxes in the short term. Modest income earners will end up paying more taxes in the long run. Plus these tax cuts are not paid for -- are you following all this?

#62 | Posted by PinchALoaf at 2018-02-12 07:28 PM

"Acknowledging that many Americans get by on a fixed income is not hateful."

No. Its when you start institutionalizing blame and laying at the feet of a completely unrelated population that it becomes hate speech.

Or maybe the Jews were stealing what rightfully belonged to the German people...

#63 | Posted by madbomber at 2018-02-12 07:34 PM

"Oh and by the way I think all Federal workers except for the Military should not get the Tax Cut. They do not produce anything."

If we're being honest, the military very likely pays some of the lowest tax rates out there. In any given month, about 20% of my income is (federal income) tax free. I don't pay state taxes at all. In another month, I won't be paying any taxes, other than for Social Security and Medicare. And those are entitlements...not real taxes.

And that's before I start deducting.

#64 | Posted by madbomber at 2018-02-12 07:38 PM

"I explained FOR YEARS in the Nooner to YOU and the rest of the Nematode Brigade that Obama CUT your taxes with his 2009 Stimulus. " - #62 | Posted by PinchALoaf at 2018-02-12 07:28 PM

Ah, but the problem is, the Obama tax cut was worth only 3/5s for white people.

That's why they don't recognize it.

#65 | Posted by Hans at 2018-02-12 09:18 PM

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