For those of you who are intimately familiar with how the Republican Party operates, this shouldn’t come as a shock. Their entire existence is comprised of lying to the American people about how they’re working for them, all while they pass bills specifically designed to rip money out of our pockets and hand it over to our corporate oligarchs. White House Press Secretary Sarah Huckabee Sanders said that “more than 70% of this [tax cut] will be returned to workers.”
She lied. Per NBC:
The Republican tax reform package that was supposed to raise wages and spur hiring has instead funded a record stock buyback and dividend spree, benefiting investors and company executives over workers.
This isn’t up for debate. This data comes straight from the horse’s mouth, as NBC elaborated.
Stock repurchases hit nearly $190 billion in the first quarter for the S&P 500, according to preliminary results from S&P Dow Jones Indices. The last time that record was set was just before the Great Recession, when companies bought up almost $172 billion of buybacks.
Compounding the issue is a recent study by the Office of SEC Commissioner Robert Jackson that found that a stock buyback announcement often leads to a short-term stock price pop, which corporate insiders use to cash out their shares.
“I think it’s high time the SEC reexamine its outdated buybacks rules,” said Rob Jackson, a commissioner at the agency.
Dividends are cash payments to stockholders. It’s like a bonus for owning a slice of a company. Stock buybacks are exactly what they sound like, and their ultimate effect is that they reduce the number of shares available on the market, which in turn raises the price of the stock, thus raising the net worth of shareholders of said stock. Those shareholders can then turn around and sell some stocks at an artificially inflated price, cashing in a higher profit for themselves while adding precisely zero value to the economy (at best). Essentially, the Republican tax cut functioned as a form of market manipulation, strictly benefiting the richest among us.
This is what happens when you base an entire society around capitalism, and not democracy. By definition, the interests of shareholders are supposed to supersede those of citizens. That’s why we can’t do anything about climate change, because the CEO of ExxonMobil has more power over the government than all 330 million of us combined. It’s in their best interests to allow the seas to swallow cities like New Orleans and Miami over the coming century, because that means they’ll continue to make record profits. If we forced ExxonMobil and the like to help the fight against climate change, every coastal city would be less threatened, but BP’s board of directors would have to sell a few vacation homes. This is the conscious tradeoff we’re making.
And so it should come as no surprise that the GOP tax cut stole money from non-rich folks in order to give rich folks more money. This is the modus operandi of the Republican Party. Anyone with a net worth under seven figures is seen as a nuisance by them, and the only reason they haven’t gone full corporate totalitarianism is because we have just enough democracy remaining that they still need our votes. This is where they trick us by using bullshit phrases like “job creators.” There’s a reason you never hear them talk about wages, because that would force them to address the fact that their policies have failed the American worker over the last half century.
If the GOP was forced to campaign on wages, their arguments would sound a lot less convincing. That’s why when the tax cut was announced, AT&T’s CEO said they were giving a one-time bonus of at least $1,000 to over 200,000 employees, but said nothing about raising salaries. Had they raised average salaries instead of essentially paying hush money to its poorer workers, then this tax cut would actually be doing what the Republicans claimed it would do. But if it did what the GOP asserted it would do, then they would never get those juicy donations from our oligarchs. AT&T is a perfect example of what this tax cut really was about. Per the Wall Street Journal back in January:
AT&T Inc. booked a $20 billion gain from the federal tax overhaul and said it expects to keep an extra $3 billion in cash this year from the lower rate, a windfall the company plans to spend on enhancing its network.
The corporate tax overhaul, a long-held goal for Chief Executive Randall Stephenson, helped AT&T book a $19 billion profit in the fourth quarter, though its revenue slipped 0.4%.
AT&T’s revenue was down, but its profits were up. If that isn’t a billion-dollar government handout, I don’t know what is. This is only going to get worse as America continues to descend into a full-blown corporatocracy, which is functionally something like a capitalistic version of serfdom. For example, even if you don’t use Facebook, enough of your friends do that Mark Zuckerberg still knows more about you than most of your family. As much as you may want to boycott AT&T over suckling at the teat of the GOP tax scam, that’s become increasingly more difficult as they just acquired cable giant TimeWarner. I worked for merchant services and learned that multiple sales outlets are owned by a single processor, giving business owners the false impression that they have a choice in who gets to siphon off an undisclosed portion of their revenue. No matter what you decide to do with your purchasing power in this country, it will inevitably flow back towards our oligarchs, partially facilitated by the Republican Party. This is America.
Jacob Weindling is a staff writer for Paste politics. Follow him on Twitter at @Jakeweindling.