Hot Potato Shows Why Workers Wont Benefit From Trumps Corporate Tax Cut

by Steven Pressman at Common Dreams

https://www.commondreams.org/views/2017/11/20/hot-potato-shows-why-workers-wont-benefit-trumps-corporate-tax-cut

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Furthermore, when asked how they’d spend the gains from a tax holiday on the $2.5 trillion that they currently have parked overseas – which is also part of the corporate tax cut plan – most companies indicated they’d pay back debt, repurchase shares or invest in mergers and acquisitions. Wage hikes were not high on the corporate agenda.

Nor have they been part of the corporate agenda for the past several decades. Since the 1970s worker productivity has increased 74 percent, while average wages have risen only 12 percent. There is no reason to believe that tax cuts would all of a sudden generate greater corporate generosity for workers.

As for lower prices, if the U.S. economy were dominated by small businesses, intense competition would force these companies to lower prices rather than give it to shareholders in the form of dividends. Reduced prices for goods would translate into improved living standards for workers the same way that a wage hike would.

But our economy today is dominated by large multinational corporations facing little pressure to reduce prices. So, the gains from a corporate tax cut will remain with the owners of the business – shareholders.

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