CEOs abandon Trump, admit corporate tax giveaways won't benefit American workers

With the Senate vote looming on the Republican scheme to hand out tax cuts to donors, corporations, and millionaires, CEOs of major corporations are going on the record and completely undercutting a key White House talking point. It’s the fantasy spin that big business will immediately use the tax savings to shower their employees with higher wages.

The White House even claimed the corporate tax giveaway would increase average household incomes by $4,000 to $9,000.

Not many serious economists believe that to be true because history has shown that it’s not true. It simply does not happen. Instead, corporations stockpile the savings or peddle them back to shareholders.

Increasingly, even CEOs concede the White House spin is completely hollow.

“Major companies including Cisco Systems Inc., Pfizer Inc. and Coca-Cola Co. say they’ll turn over most gains from proposed corporate tax cuts to their shareholders, undercutting President Donald Trump’s promise that his plan will create jobs and boost wages for the middle class,” Bloomberg reported on Wednesday.

John Bogle, founder of Vanguard Group, called the plan “a moral abomination” specifically because those corporations “will hand over the proceeds to shareholders” instead of workers.

The Republican bill, which is being rushed through Congress without traditional hearings or testimony from expert witnesses, would slash the corporate tax rate from 35 to 20 percent, a giveaway that’s unlikely to benefit most Americans.

Summing up the bill’s winners and losers, The New York Times recently listed as the winners, “Business,” “Multinational Corporations,” “The Rich And Their Families,” and “Hedge Funds.”

At a Wall Street forum earlier this month featuring Trump’s top economic adviser, Gary Cohn, the moderator asked business leaders in the audience for a show of hands if they planned to reinvest tax cut proceeds. Few people responded.

“Why aren’t the other hands up?” a nervous Cohn asked.

It’s another reason why voters aren’t buying what the GOP is selling. Traditionally, the idea of tax cuts is nearly universally popular with most Americans. But this pending bill is viewed negatively by a two-to-one margin, according to one recent poll.

Voters, like CEOs, see right through the White House spin on taxes.