As critics of the tax bill feared, the pharmaceutical industry is using their windfall from the Republican bill “to boost its stock prices” through spending $50 billion in stock buybacks, according to Axios.
While workers and consumers aren’t benefiting from this boondoggle, “that money is enriching hedge funds, other Wall Street investors and top drug company executives,” Axios said.
In the lackluster aftermath of the overhyped tax bill, Republicans such as Orange County’s Rep. Mimi Walters strenuously protested that the bill was an enormous giveaway to rich corporations while leaving workers behind.
To paraphrase William Shakespeare,”Perhaps the lady doth protest too much.”
As Patti Domm with CNBC notes, “Democratic lawmakers who have been critical of the GOP bill have claimed it would be used for such things as share buybacks to enrich shareholders, rather than for capital expenditures or improving worker pay.” Now that the bill is law, it turns out that the critics were right.
During the brief congressional debate on it, the tax bill was enormously unpopular in California.
The head of the Orange County Taxpayers Association emphatically said the bill “is not a tax-cut bill for individual taxpayers in California.” In fact, the bill raises taxes on millions of Californians.
Yet California Republicans like Walters and embattled Rep. Steve Knight (Palmdale) ignored warnings from constituents, colleges and universities, and the business community to side with Trump’s agenda and give the bill the critical yes votes it needed to pass.
Corporations using the tax bill to fill the overstuffed coffers of investors is only part of the problem.
Despite the massive tax giveaway to corporations, the pharmaceutical industry began 2018 by hiking up the price of drugs. So patients will see higher prices, while Wall Street investors are showered with $50 billion in stock buybacks to boost stock prices.
The pharmaceutical industry isn’t the only part of corporate American prioritizing rich investors over workers. “American companies have lavished Wall Street with $171 billion of stock buyback announcements so far this year,” according to analysis by research firm Birinyi Associates.
Unfortunately, the amount of money spread among everyday jobholders comes to a measly 3 percent of what corporations are “lavishing” on Wall Street, according to recent research.
Meanwhile, the promised wage increases from the tax bill haven’t materialized. In a recent survey, a majority of Americans did not see an increase in their paychecks since the tax bill passed. Only 1 in 4 did.
Californians are being left behind, but the bill championed by Walters and Knight has ushered in a “golden age” for the luxury private jet industry.
Democratic Rep. Judy Chu (Monterey Park) recently met with constituents to discuss the impact of the tax bill. Afterward, she lamented the partisan nature Republicans used to push through such a skewed bill, saying, “Republicans completely cut Democrats out of what should have been a bipartisan process, and chose to rush through passing a bill that cuts taxes on corporations and the wealthiest few, while raising taxes on families and borrowing $2 trillion from our children to make today’s rich richer.”
While Knight and Walters cling to half-truths and deception, voters know the tax bill was a bad deal for California. In November, voters will decide if lawmakers like Knight and Walters are a bad deal