Big banks and rich corporations hoard billions from GOP tax bill

Congressman Steve Knight

While workers are left behind, Wall Street banks and wealthy corporations are hoarding billions in profits, thanks to Republicans like Congressman Steve Knight.

The tax bill is lavishing billions of dollars of profits on big banks and Wall Street corporations, while executives are admitting workers are unlikely to see raises anytime soon.

Republicans including Reps. Steve Knight (Palmdale) and Mimi Walters (Irvine) promised a tax bill that would benefit families, but that is not what the economic data shows.

“The tax cuts were supposed to unleash economic growth and increase jobs,” wrote Quartz, a news outlet focusing on business and the economy. “But so far they’re mainly goosing profits.”

According to Quartz’s reporting, big banks are employing 5,000 fewer workers than a year ago, but they saw profits surge to $55.9 billion in the first quarter of 2018. Quartz estimates that roughly $6 billion of the profit is from the Republican-passed tax bill.

Most workers, on the other hand, haven’t noticed any difference in their paychecks, according to a series of polls conducted in 2018.

And while workers are being left behind, many wealthy corporations are noticing a massive increase in profits. According to a recent analysis by Bloomberg, rich companies are on pace to get a $1.64 trillion kickback from Congressional Republicans, $300 billion more than lawmakers forecasted.

“Of course, companies were expected to receive the bulk of the tax savings,” writes Bloomberg. “That’s how the plan was designed.”

The corporate tax cuts are permanent, while savings (if any) for individuals expire within the next ten years. As Bloomberg notes, Congress’ preference for corporations over families has been evident all along:

So far, that real money is by far mostly going to shareholders and not workers — but then again, most American workers never liked this tax-cut scheme anyway. They still don’t. This was Corporate America’s baby all along.

In other words, the enormous imbalance is not a fluke; it is exactly what Republicans like Knight and Walters voted for.

When he was aggressively championing the bill as it was in Congress, Knight boasted it would be “a tax code that puts American families first.” But the reality of the bill is much different.

Months after the bill passed Congress, CEOs are being honest about what will happen to workers. Corporate executives are are candidly saying “Americans should stop waiting for across-the-board pay hikes coinciding with higher corporate profit,” reports Axios.

“Now,” Axios continues, “executives of big U.S. companies suggest that the days of most people getting a pay raise are over, and that they also plan to reduce their work forces further.”

While Knight and Walters voted to dole out massive kickbacks to Wall Street, Californians aren’t so lucky.

About one million Californians are on the hook for an additional $12 billion in taxes next year. For homeowners in Walters’ Orange County, taxes may go up by $4,500 this year. Knight’s Los Angeles-area residents could see 30-year mortgages cost $76,000 more.

Many small business owners are opposed to the bill, as it is seen as tilting the playing field even more in favor of large, wealthy corporations.

And California voters are deeply unsatisfied with the bill. Polling shows that most Californians are less likely to vote for someone who supported the tax bill like Knight and Walters did.

The more time goes by, the more voters are learning about who exactly is benefitting from the tax bill.

And who is not.