AlterNet reports
When Republicans in Congress passed a big, fat tax break bill in December, they insisted it meant American workers would be singing "Happy Days Are Here Again" all the way to the bank. The payoff from the tax cut would be raises totaling $4,000 to $9,000, the President's Council of Economic Advisers assured workers. But something bad happened to workers on their way to the repository. They never got that money.
In fact, their real wages declined because of higher inflation. At the same time, the amount workers had to pay in interest on loans for cars and credit cards increased. And, to top it off, Republicans threatened to make workers pay for the tax break with cuts to Social Security, Medicare and Medicaid. So now, workers across America are wondering, "Where's that raise?". It's nowhere to be found.
The U.S. Bureau of Labor Statistics reported this week that wages for production and nonsupervisory workers decreased by 0.1 percent from May 2017 to May 2018 when inflation is factored in. The compensation for all workers together, including supervisors, rose an underwhelming 0.1 percent from April 2018 to May 2018.
That's not what congressional Republicans promised workers. They said corporations, which got the biggest, fattest tax cuts of all, would use that extra money to increase wages. Some workers got one-time bonuses and an even smaller number received raises. But not many. The group Americans for Tax Fairness estimates it's 4.3 percent of all U.S. workers.
The New York Times story about this record breaker describes the phenomena this way: "Companies buy back their shares when they believe they have nothing better to do with their money than to return capital to shareholders." So despite promises from the GOP and the President's Council of Economic Advisers, corporations believed further enriching their own executives and shareholders was a much better way to use the money than increasing workers' wages--wages that have been stagnant for decades.
(Score: 2) by JoeMerchant on Thursday June 21 2018, @11:56PM (6 children)
That has never actually been true. Even if I'm giving back 75% of every dollar earned, I'm still getting more, more is always better.
🌻🌻 [google.com]
(Score: 5, Insightful) by Immerman on Friday June 22 2018, @12:32AM (5 children)
In 1944-45 the top tax bracket, over $200,000 (2.9 million in 2009 dollars), was taxed at 94%. If the corporation is only pocketing 6% of every additional dollar it earns, it's probably a lot better off dumping the whole dollar into salaries or other operating costs in order to grow the business and/or paying more to increase the quality and loyalty of the employees working there.
(Score: 0) by Anonymous Coward on Friday June 22 2018, @12:48AM
Gee, that would be such a shame! /s
(Score: 1, Informative) by Anonymous Coward on Friday June 22 2018, @12:49AM (3 children)
The effective tax rate was less than that. Still better than what we have now, though.
(Score: 2) by lentilla on Friday June 22 2018, @09:35AM (2 children)
Would you be able to expand further?
(Score: 3, Interesting) by AthanasiusKircher on Friday June 22 2018, @12:49PM (1 child)
The nominal tax rate is basically NEVER what rich people pay. They can afford accountants and tax attorneys and foreign bank accounts to get around as many taxes as possible. The effective rate the rich paid back in the 1950s when the nominal income tax rate was >90% was probably about 42% [slate.com]. These days, they pay more like 36%.
I used to harp on the fact that tax rates used to be so much higher too. Until I realized the effective overall tax rate on the richest hasn't varied that much over time. Basically, the higher the taxes, the more incentive rich people have to hire lawyers to figure out ways around them. That's not to imply that tax increases on the wealthy have no effect, but they're often significantly less than what it looks like if you just quote the nominal tax rate.
(Score: 2) by JoeMerchant on Saturday June 23 2018, @01:19PM
A big part of what these "tax loopholes" are doing is telling the rich how to use their money.
Personally, if I had all that much money, I'd be more offended by being told how to use 80% of it so I could keep 55% of the total, instead of doing whatever I damn well pleased with it and only keeping 45% of the total.
🌻🌻 [google.com]