Congresswoman Mimi Walters (R-Irvine) championed a tax bill that lays out clear winners and losers: Wealthy Wall Street tycoons are winning, while workers and California taxpayers are losing out. At least, that’s the way it looks based on the economic data so far.
At the time the unpopular bill passed Congress, Walters promised higher wages and declared, “When all is said and done, California taxpayers will benefit from this historic tax package and the American economy will flourish.”
In reality, though, it looks like only Wall Street is flourishing.
In the second financial quarter of 2018, “Flooded with cash from the Republican tax cut, US public companies announced a whopping $436.6 billion worth of stock buybacks, according to research firm TrimTabs,” reports CNN.
Stock buybacks “help enrich corporate executives, whose compensation is often linked to their share price,” continues CNN.
This staggering amount set a new record. The previous record was $242.1 billion, set during the first quarter of 2018.
Workers, meanwhile, are not faring as well. According to Americans for Tax Fairness, only four percent of Americans have seen a raise or one-time bonus. The data is even worse when it comes to wages. Per CBS News:
Worker pay in the second quarter dropped nearly one percent below its first-quarter level, according to the PayScale Index, one measure of worker pay. When accounting for inflation, the drop is even steeper. Year-over-year, rising prices have eaten up still-modest pay gains for many workers, with the result that real wages fell 1.4 percent from the prior year, according to PayScale. The drop was broad, with 80 percent of industries and two-thirds of metro areas affected.
Wall Street is celebrating billions of dollars in buybacks while workers are being squeezed even more. CNN helps put into perspective the discrepancy between stock buybacks and worker bonuses: “TrimTabs notes that the $436.6 billion of buybacks announced during the second quarter would have paid for a $1,000 bonus check to be sent to 6.8 million workers — every single trading day.”
While workers across America are receiving the short end of the stick, California taxpayers are hit especially hard. According to the Franchise Tax Board, about a million Californians will pay an additional $12 billion in taxes next year, thanks to provisions in the tax bill Walters voted for. Orange County homeowners can expect a tax hike of up to $4,500.
One of Walters’ Republican colleagues, Rep. Darrell Issa (Vista) said of the tax bill, “I didn’t come to Washington to raise taxes on my constituents and I do not plan to start today.”
Walters knew there would be winners and losers in the tax bill. But she still voted to lavish Wall Street with billions of dollars in kickbacks while workers languish and Californians are stuck with higher taxes.