CEOs Aren’t Waiting for the Tax Bill to Pass — They’ve Already Started Pocketing the Windfall
« prev   random   next »

7
13

CEOs Aren’t Waiting for the Tax Bill to Pass — They’ve Already Started Pocketing the Windfall

By BayAreaObserver following x   2017 Dec 19, 3:53am 1,940 views   98 comments   watch   sfw   quote     share    


U.S. corporations are already beginning the process of pocketing the winnings from the tax bill jackpot they expect to hit any day now, undercutting, in a remarkably public fashion, the pretense that the corporate tax cut will lead to greater investment in job creation.

Since the Senate passed its version of the tax bill on December 2, 29 companies have announced $70.2 billion in stock buybacks, a maneuver that uses company cash to buy its own shares, which then drives up the price of those shares, rewarding major investors and executives whose compensation is directly tied to the company’s stock price.

The figure comes from a new report by Senate Democrats, which relies on the public statements of company executives. Stock buybacks, meanwhile, had been declining. There were $120 billion in buybacks in the entire second quarter of 2017, among all companies. The new figure — $70.2 billion in just 10 days, from just 29 companies — suggests that a surge of buybacks is in the offing if the tax bill becomes official, representing a staggering transfer of wealth from taxpayers straight to the wealthy.

As part of the tax bill, corporations will be able to bring back trillions of dollars parked overseas at a much lower tax rate than current law. Companies also benefit from a slashing of the corporate tax rate from 35 percent to 21 percent and the elimination of the corporate “alternative minimum tax,” which enables the use of as many deductions as possible to hold onto earnings.

Republicans insist that the trillions of dollars headed back to corporations will get funneled into investments, job creation, and wage growth, a recitation of the theory of trickle-down economics. Corporate CEOs beg to differ. In a now-famous interlude with White House National Economic Council Director Gary Cohn, CEOs were asked whether they would spend more from corporate treasuries if the tax bill passed. Only a few raised their hands. “Why aren’t the other hands up?” Cohn pleaded.

We now have 70.2 billion reasons why. And counting.





The companies announcing buybacks include some of the biggest in the world, like Home Depot, Oracle, Honeywell, Bank of America, Anthem, Boeing, MasterCard, and United Airlines. All of the announcements have come since December 5.

“Corporate CEOs have made clear that the massive tax giveaways in the Republican plan will not be passed on to workers but to rich investors — including the wealthy foreign investors who own about a third of the shares in American companies,” said Sen. Elizabeth Warren, D-Mass., in a statement accompanying the Senate Democrats’ report. “This plan will do nothing to stimulate the economy or raise wages — but it sure will make a bunch of rich guys a lot richer.”





More: https://theintercept.com/2017/12/18/tax-bill-corporate-rate-stock-buyback/

#Tax #BuyBack

« First    « Previous     Comments 81 - 97 of 97     Last »

81   BayAreaObserver   ignore (1)   2017 Dec 28, 4:57pm   ↑ like (1)   ↓ dislike (1)     quote      

@zzyzzx Hey guy, on those 1K bonuses are you salaried exempt or salaried non-exempt ? The reason I ask is I ran across something the other day and did not know if you were represented by the Communications Workers Union.

"AT&T promised $1,000 in bonuses because of the GOP tax plan on Wednesday. But the union representing AT&T workers bargained for that bonus earlier this month."

https://www.thedailybeast.com/atandt-credits-trump-for-bonus-its-union-already-negotiated

https://wtop.com/national/2017/12/att-1000-tax-bonus-came-after-exchange-with-union-head/

https://www.cwa-union.org/news/cwa-represented-workers-att-get-1000-bonus

MSM nor the non-MSM made much light of the layoffs announced at AT&T on December 24th or the Price Increase for the offerings starting January 2018.

Nor was much light shed on the proposed merger that is in the works and how giving out this bonus might be looked upon favorably in Washington.
82   zzyzzx   ignore (1)   2018 Jan 2, 7:45am   ↑ like (2)   ↓ dislike (0)     quote      

I got the AT&T bonus as of December 29th. Wish they would have paid it out this year instead though.
83   zzyzzx   ignore (1)   2018 Jan 2, 8:02am   ↑ like (1)   ↓ dislike (0)     quote      

BayAreaObserver says
are you salaried exempt


Salaried exempt. I also got the email stating that I would get this extra bonus.
84   HappyGilmore   ignore (1)   2018 Jan 2, 8:07am   ↑ like (1)   ↓ dislike (1)     quote      

I guess we know where that bonus money is coming from now:

http://www.newsweek.com/christmas-att-layoffs-midwest-bonuses-trump-758391
“How can you lay people off and then give them $1,000 and say that there’s going to be more jobs available? I wish someone could tell me how that’s possible because I have to explain that to my members, and right now at this time of year, this is a difficult pill to swallow,” Joseph Blanco, president of Local 6360 Communication Workers of America Union in Kansas City, told Fox 4 on Thursday.
85   anon_13ce6   ignore (0)   2018 Jan 2, 9:06am   ↑ like (2)   ↓ dislike (0)     quote      

zzyzzx says
I got the AT&T bonus as of December 29th. Wish they would have paid it out this year instead though.


Yes they paid it last year because it will help lower the taxes they have to pay. Next year all those bonuses will go to the share holders because they won't have to pay as high of taxes on that profit ... so no more bonuses for you.
87   zzyzzx   ignore (1)   2018 Jan 2, 11:13am   ↑ like (1)   ↓ dislike (2)     quote      

HappyGilmore says
http://www.newsweek.com/christmas-att-layoffs-midwest-bonuses-trump-758391
“How can you lay people off and then give them $1,000 and say that there’s going to be more jobs available? I wish someone could tell me how that’s possible because I have to explain that to my members, and right now at this time of year, this is a difficult pill to swallow,” Joseph Blanco, president of Local 6360 Communication Workers of America Union in Kansas City, told Fox 4 on Thursday.


Ummm,,, check out who is getting laid off there and it's mostly land line people.
88   BayAreaObserver   ignore (1)   2018 Jan 6, 10:39am   ↑ like (1)   ↓ dislike (2)     quote      

Comcast fired 500 despite claiming tax cut would create thousands of jobs. As Comcast pushed for tax cut, fired employees had to sign NDAs to get severance.

Comcast reportedly fired about 500 salespeople shortly before Christmas, despite claiming that the company would create thousands of new jobs in exchange for a big tax cut.

Comcast apparently tried to keep the firings secret while it lobbied for the tax cut that was eventually passed into law by the Republican-controlled Congress and signed by President Trump in late December. The Philadelphia Inquirer revealed the Comcast firings this week in an article based on information from an anonymous former employee, Comcast documents, and other sources in the company.

The former employee who talked to the Inquirer "could not be identified because of a nondisclosure agreement as part of a severance package," the article said. The Inquirer headline notes that Comcast was able to implement the firings "quietly," avoiding any press coverage until this week.

Ars asked Comcast today if all 500 fired employees had to sign those nondisclosure agreements, but we didn't receive an answer. We also asked why the firings were necessary given that the tax cut was supposed to create more Comcast jobs, and we asked if Comcast has specific plans to create jobs in other areas.

Comcast gave us this statement but offered no further details: "Periodically, we reorganize groups of employees and adjust our sales tactics and talent. This change in the Central Division is an example of this practice and occurred in the context of our adding hundreds of frontline and sales employees. All these employees were offered generous severance and an opportunity to apply for other jobs at Comcast."

A Comcast spokesperson also confirmed the firings to the Inquirer.

And at AT&T...

Comcast isn't the only company whose actions contradict statements that workers would benefit from the corporate tax cut. AT&T claimed that it would invest another $1 billion because of the tax cut and said that "research tells us that every $1 billion in capital invested in telecom creates about 7,000 good jobs for the middle class."

But as we wrote yesterday, AT&T is now laying off thousands of employees and is facing a lawsuit from a workers' union that is trying to stop the mass layoffs.

https://arstechnica.com/tech-policy/2018/01/comcast-fired-500-despite-claiming-tax-cut-would-create-thousands-of-jobs/?comments=1
89   Sniper   ignore (10)   2018 Jan 6, 12:03pm   ↑ like (9)   ↓ dislike (3)     quote      

BayAreaObserver says
Comcast fired 500 despite claiming tax cut would create thousands of jobs.


Ha ha ha, what point is that????

Comcast has 153,000 employees, so firing 0.3% of them isn't even a rounding error, and most likely, were slugs and dead wood that needed to go...

Ha ha ha, TDS TDS TDS TDS



90   Booger   ignore (0)   2018 Jan 6, 6:45pm   ↑ like (3)   ↓ dislike (0)     quote      

Trump is literally raping people. His tax reform is making businesses want to forcefully insert money into peoples bank accounts. This has to stop!
91   Strategist   ignore (1)   2018 Jan 6, 6:54pm   ↑ like (0)   ↓ dislike (0)     quote      

HappyGilmore says
“How can you lay people off and then give them $1,000 and say that there’s going to be more jobs available? I wish someone could tell me how that’s possible because I have to explain that to my members, and right now at this time of year, this is a difficult pill to swallow,” Joseph Blanco, president of Local 6360 Communication Workers of America Union in Kansas City, told Fox 4 on Thursday.


Dear Joseph Blanco,
If you cannot understand why the unemployment rate is going down, you are not capable of understanding much of anything. Just tell your union members .....Greedy capitalists want to make more money, which is why they lay off hard working people and allowing their children to starve. WE NEED MORE SOCIALISM. Your foolish members will believe anything.
92   rootvg   ignore (0)   2018 Jan 7, 8:50am   ↑ like (1)   ↓ dislike (0)     quote      

HappyGilmore says
just any guy says
So what? Stop being a whiner. Interest rates are low and I'm making more money than ever.


Yep, in other words "got mine, eff you". It's the Republican platform.

Congrats. Enjoy it while you can.


That isn't exactly true but even if it were, you couldn't do anything about it.

I said to someone here a few minutes ago that Trump was a reaction to Obama. If you voted for Obama in a fit of rage over what happened during Bush 43, you are indirectly responsible for the Republicans collectively romping through the tax code like kids on a field trip. If you really want to see some action, wait until after the 2018 Senate races. I have a Poli Sci academic background and then many years of working campaigns. I don't exactly know the movers and shakers but have certainly met many of them along the way. Trump will extend his Senate majority. I have a hundred dollar bill in my wallet that I would put in the hands of a trusted third party to wager on it. Republicans will probably lose a few House races here and there but no way are they in danger of losing control. That can't happen anytime before 2022, after reapportionment.

What happened in 2016 was a big goddamn deal. By the time Democrats figure out who they are and rebuild their finances, Trump and his people will have so polluted the Cabinet level agencies and judiciary that it just won't matter. It definitely won't matter for me at age 52.

As for California, I'm thinking Jerry and his people will hold their breath praying for an impeachment. There were certain things in the tax bill that give the left reason for concern. Mnuchin said many times that the deduction for state and local tax would be either reduced or removed to stop the red states from subsidizing the blue. We also know (not being reported by most media) that the deduction for home equity lines of credit was removed. Whoa! Talk about a broadside to California. That's gonna hurt. I remember that when the deduction for credit card interest was removed from the tax code in 1986, it was followed by a slowdown in states where people carry a lot of debt...like California. That will happen again.

I'm hearing more and more that the result of the 2016 elections was the next thing to Hirohito standing on the deck of the USS Missouri in a tux, ready to sign the surrender. That's how people in the south see it. I travel there for work every month and I have seen it. The other party will recover but it will be years in the making. Their leadership is corrupt. They're flat dead broke. They have to find a way to divorce their finances from that of the Clintons, something that by itself will be a herculean task and while that's going on the conservatives will slowly but surely vacuum up control of everything that isn't nailed down.
93   anon_49a06   ignore (0)   2018 Jan 7, 9:29am   ↑ like (0)   ↓ dislike (0)     quote      

HappyGilmore says
just any guy says
Until inequality gets so bad such that someone can't make good decisions, work hard and make a good living, your inequality argument means nothing. There is nothing stopping any able-bodied individual from making it in this country.

My comments may hurt and be personal, but I'm just being blunt and honest and they're relevant to the arguments you're making. It's a bitter pill, but it is what it is. If I started calling your wife ugly, that would be crossing the line.


Whether you're crossing the line is up to the moderator and lucky for you, he's an extremely biased Trumpkin so he only zaps posts from people who criticize his Messiah.

But you're wrong. Inequality has huge effects on the economy as I have already showed you. Look at velocity of money. Look at interest rates. The data is right in front of your face.


(sigh)

It isn't the United States of California. Most states or even regions do not have the whole free spending, velocity of money thing going on.

I've said before that without Obama, there would have been no reaction strong enough to bring us Trump in the White House. I want you to think about that.
94   HappyGilmore   ignore (1)   2018 Jan 7, 2:52pm   ↑ like (0)   ↓ dislike (2)     quote      

anon_49a06 says
(sigh)

It isn't the United States of California. Most states or even regions do not have the whole free spending, velocity of money thing going on.

I've said before that without Obama, there would have been no reaction strong enough to bring us Trump in the White House. I want you to think about that.


All states and regions have the same issue with inequality--it's a US problem. The velocity of money is a US problem.

Trump won because Clinton was a crappy candidate. Obama would have won in a landslide against Trump.
95   HappyGilmore   ignore (1)   2018 Jan 7, 2:53pm   ↑ like (0)   ↓ dislike (3)     quote      

rootvg says
I have a Poli Sci academic background and then many years of working campaigns. I don't exactly know the movers and shakers but have certainly met many of them along the way. Trump will extend his Senate majority. I have a hundred dollar bill in my wallet that I would put in the hands of a trusted third party to wager on it.


uh-huh. You said the same thing in 2012 so forgive me if I don't put a lot of weight in your "inside" info.
96   Quigley   ignore (0)   2018 Jan 7, 3:06pm   ↑ like (1)   ↓ dislike (0)     quote      

@rootvg very insightful and informative post!
It’s good to see some of the old guard post now and then. I swear everyone (except for perhaps Iwog) has matured tremendously and become wise in the ways of the world. Just when I swear I can’t take another trollish post, one of the originals shows up and justifies Patnet.
97   just any guy   ignore (0)   2018 Jan 7, 4:20pm   ↑ like (1)   ↓ dislike (0)     quote      

HappyGilmore says
Obama would have won in a landslide against Trump.
And thank Christ we limit Presidents to 2 terms.

« First    « Previous     Comments 81 - 97 of 97     Last »


Comment as anon_5530f or log in at top of page: