Wealthy corporations and rich shareholders are hoarding the gains from the tax bill championed by Congresswoman Mimi Walters (R-Irvine), while workers are left out in the cold, according to recent economic analyses.
“American businesses got a huge tax cut in the first quarter, but they didn’t do much with the extra cash,” says MarketWatch. “Most of the dough ended up in their bank accounts.”
That’s not what Walters promised when she voted for the tax bill in December 2017. At the time, Walters was adamant that families, not her Wall Street donors, would be the main beneficiaries.
“This bill will also lower rates for job creators in order to increase economic growth and create opportunities for all Americans,” Walters claimed. But her promises don’t match up with reality.
“So far, that real money is by far mostly going to shareholders and not workers,” reports Bloomberg. In fact, wealthy corporations are set to rake in $1.64 trillion from the tax bill congressional Republicans rammed through, $300 billion more than lawmakers forecasted.
Rather than companies investing in workers and new jobs, Wall Street investors are swimming in kickbacks in the forms of stock buybacks and dividends. Workers, meanwhile, are being left behind.
“[T]he shareholder class has enjoyed double-digit returns since Trump took office,” says Yahoo Finance. “Many ordinary workers wonder when their turn is coming.”
Those Wall Street shareholders are repaying Walters for her vote. She has raised more than $140,000 from the securities and investment sector, according to the Center for Responsive Politics.
Meanwhile, the Chamber of Commerce, a business lobbying group, is paying for glowing television ads spinning the tax bill in a favorable light for Walters.
Voters, on the other hand, are sick and tired of Wall Street’s outsized influence over politicians like Walters. In a recent survey of voters in 100 battleground districts (including Walters’ district), Lake Research Partners found a majority of voters agree “Wall Street’s influence in Washington is too high.” And a majority of voters are less likely to support candidates, like Walters, who take campaign cash from big banks and Wall Street.
While Walters’ vote for the tax bill is working out well for Wall Street, Californians got the short end of the stick. Because of provisions in the tax bill, Orange County homeowners could see a $4,500 tax hike. Overall, about a million Californians are on the hook for $12 billion in more taxes this year. And unlike profits seen by Wall Street investors, American workers repeatedly say they are not seeing any change in their paychecks.
And CEOs are telling workers not to count on pay raises in the future, despite record levels of kickbacks to shareholders. According to Axios, “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.”
Voters were sold on the promise that the tax bill was focused on middle-class families. But that’s just not the case.
“Of course, companies were expected to receive the bulk of the tax savings,” writes Bloomberg.
“That’s how the plan was designed.”