In announcements late Tuesday, Nov 28th, Coca-Cola, Cisco & Pfizer said they plan to give the Trump tax cuts to their shareholders. Well…at least they are honest about it.
In this linked article from Bloomberg News, it clearly shows that the proposed Trump Tax Cuts will not be used to “invest” in their companies, or in their workers, or in hiring new workers. It will instead be used to return dividends to their shareholders and investors.
This tax cut bill will not be used to ‘grow’ American companies by their own admission. The simple truth is, American companies are flush with trillions in cash. The banks and lending agencies would love to loan them even more money at near zero rates, if the companies wanted/needed it. If companies wanted to, they could invest right now without said tax cuts. Quite obviously, this is not about ‘growth’ or GDP.
At least now they are calling it what it is: A ‘tax cut’, and not ‘tax reform’. So, at least some truth is seeping back into the rhetoric. By company CEO admission, we now see that tax cuts will not go to workers in the form of salary increases; at least not in the companies mentioned in the linked article from Bloomberg. While tax cuts can be good things to promote “growth” in times of poor stock market trends; these tax cuts put no barriers on how companies can use the extra cash, which results in companies instead of investing, returning that money to shareholders. If Congress was serious about ‘growth’ they would have put in clauses and restrictions, or maybe “guard rails” is a better phrase, as to how companies are to use those monies.
Get ready for the Kentucky version of the Federal tax cut soon also. Our Governor has already stated that once he has done away with teacher and state worker pensions, that he too will “move on to tax reform”. Which means “tax cuts” for so very few, very wealthy in this state. This state’s administration is taking its orders from the same playbook as the Federal Congress.