Wells Fargo CEO reveals the scam at the heart of Republicans tax bill
Source: Think Progress
The House of Representatives is set to vote on the final version of the GOP tax bill Tuesday, with the Senate to follow close behind. Most Republican members of Congress are heralding the plans giant, permanent tax cut for corporations as the reason behind their support. The GOP argues that when corporations get a tax cut, they put that money toward creating more jobs and raising wages.
But history shows that just isnt correct and history may be about to repeat itself.
In an interview with CNN Money, Wells Fargo CEO Tim Sloan made it clear what he plans to do with the corporations tax windfall and it doesnt benefit the average American worker.
Is it our goal to increase return to our shareholders and do we have an excess amount of capital? The answer to both is, yes, Sloan told CNN Money. So our expectation should be that we will continue to increase our dividend and our share buybacks next year and the year after that and the year after that.
Read more: https://thinkprogress.org/wells-fargo-ceo-tax-reform-job-6b6b8462f239/
This is the same firm mind you that created accounts to enrich there bottom line, and was using employees to scam these made up accounts
November 2018 can't get here fast enough
exboyfil
(17,865 posts)than our Republican legislators and executive branch.
CousinIT
(9,259 posts)I know something about this subject. Forty years ago, while working for New York Rep. Jack Kemp, I helped originate the Republican obsession with slashing taxes that came to be called supply-side economics. While I believe this theory played a useful role in economic theory and policy in the late 1970s and early 1980s, it has long outlived its usefulness and is now nothing but dogma completely divorced from reality.
. . .
Republicans believe that statutory rates of taxation are all-powerful, even though almost no one pays them; deductions, credits and exclusions reduce the effective tax rate (taxes divided by income) in many cases to zero. But the historical experience tells us this theory is nonsense. The Tax Reform Act of 1986 reduced the top personal income tax rate to just 28% from 50%, and the corporate tax rate to 34% from 46%. Yet there was no increase in the rate of economic growth in subsequent years and by 1990 the economy was in a deep recession.
Strenuous efforts by economists to find a growth effect from the 1986 act have failed to find any.There were accounting effects as income was shuffled around to take advantage of tax changes, but no rise in investment or any significant effect on labor supply. "The aggregate values of labor supply and saving apparently responded very little," economists Alan Auerbach and Joel Slemrod concluded in an authoritative study.
Virtually everything Republicans say about taxes today is a lie. Tax cuts and tax rate reductions will not pay for themselves; they never have. Republicans dont even believe they will, they are just excuses to slash spending for the poor when revenues collapse and deficits rise. There is no evidence that tax reform raises growth, although it may improve fairness and tax administration. And the Republican idea that tax increases always crash the economy is belied by the experiences after Bill Clinton raised taxes in 1993 and Barack Obama did the same in 2013. The economy grew nicely and the stock market boomed in both cases.
KY_EnviroGuy
(14,494 posts)FakeNoose
(32,777 posts)We shouldn't even be using that term. It just prolongs the lies.
Bengus81
(6,933 posts)Anyone think your local Mikey D's or Pizza Hut will suddenly add a load of new locations,hire hundreds and pay them $11.00 per hour to start? We have one every few miles as it is,the same could be said for Lowe's and Home Depot as far as adding any new stores.
KY_EnviroGuy
(14,494 posts)...go out and buy wheelbarrow loads of stocks so they can live off dividends. Right.
TexasBushwhacker
(20,219 posts)they use the extra cash for executive bonuses and/or dividends and stock buybacks. Those benefit stockholders who are mostly WEALTHY PEOPLE.
KY_EnviroGuy
(14,494 posts)Not to mention that much of that capital winds up being hoarded off-shore or invested in international markets and not at home.
TexasBushwhacker
(20,219 posts)That's what I just don't get. If the whole trickle down theory actually worked for the economy as a whole, I'd support it, but it doesn't. It never has. It doesn't work for anyone buy the 1%.
KY_EnviroGuy
(14,494 posts)As you know, American corporations are not held accountable for what they do with profits, other than to the stockholders and they otherwise have free reign to do as they damn well please under free market capitalism.
Maybe I was mislead in my youth (60s and 70s), but it seemed to me back then companies on average were smaller and more local, so thereby were held to account as to how they treated associated communities and employees. Nowadays, after all the years of massive M&A throughout American commerce and industry, all the corps are so big and international in scope, they simply no longer care about how they affect working people or their communities.
That, plus Wall Streets' obsession for ever increasing efficiencies, sales and margins keeps companies focused on screwing us out of every red cent. Another factor against most of us is the corporation's and wealthy people's ability to leverage their assets (money begets money), using hundreds of investment vehicles we don't have access to.
They essentially have most of our money and therefore our power.
TexasBushwhacker
(20,219 posts)The wealthy will always be able to weather the storm. Even if they lose massive amounts of their wealth, they are unlikely to end up on the street. But there will be more bankruptcies, which means creditors and contractors will be stiffed, which will beget more bankruptcies.
Fewer homes will be purchased by owner occupants, which will be bad for home values as well as the health of neighborhoods. In high tax states like NY and CA, people will have no choice but to scale down.
Fewer new cars will be sold. People will vacation and eat out less, and buy fewer non-essential items like electronics. They won't upgrade their computers every 2 or 3 years. They'll wait to upgrade software. More will cut the cord with cable and satellite TV. As fewer people shop in stores for clothes and household items, more of the mid-level retailers will close and all their employees will be laid off.
High co-pays and deductibles, for those lucky enough to have health insurance, will keep people from getting necessary medical care. While we have a shortage of experienced nurses and primary care physicians, specialists could see demand for their services go down because it's simply unaffordable.
Our overall economy depends on a STRONG middle class, and that eventually trickles up to the 1%. That's what I don't get about their greed. When our economy was robust in the 50s, 60s and 70s, we still had wealthy people, plenty of them. We just had fewer ULTRA rich because income and wealth were more equitably distrbuted.
JohnnyRingo
(18,650 posts)I have a feeling 2018 will be a banner year for back slaps and megamillion dollar bonuses in boardrooms. Life is good.. for some.
Kablooie
(18,641 posts)When you need a lot of business deductions to lower a high tax rate you use the money to create jobs, do R&D, and in general keep the money circulating and doing things. You need to get it off the books so at tax time it can be used as a deduction on your taxes.
With low rates first the amount of business deductions are much less because your tax is less. Also you don't have to do anything with your windfall but dole it out to stockholders or lock it away in a bank where it does nothing for anyone but you.
It works exactly the opposite of what Republicans say.
Low tax rates discourage job creation.
syringis
(5,101 posts)In fact, it is far from my field of competence.
But what you say is really easy to understand and very true :
Low tax rates discourage job creation.
Low tax rates means easy capital to remove from the country to any fiscal paradise or any country which may represent an interest...
High tax rates means a company will rather invest in the country, in the aim to get back some of the taxes via tax deductions. Investment, in a way or another, creates jobs, which implies more money for workers to spend, more money injected into the economy, more benefits, more taxes, better quality of life for all.
The key is to find the equilibrium point. Sometimes it needs adjustments, lowering or increasing the tax rates, interest rates, fiscal deductions,...depending of the situation of the moment.
The current tax reform is a time bomb. Considering the US economy, it is the most useless move imaginable !
It will have negative consequences far beyond the US economy. It will affect the rest of the world too.
BadGimp
(4,019 posts)ANYONE who has studied tax policies in the last 40 years knows as do the citizens of Kansas what happens when the GOP get's their way with tax cuts.
The outcome is ALWAYS the same.
not fooled
(5,801 posts)the pukes are honest about the real motivations for this abomination: rewarding donors and setting up the con to go after Social Security, Medicare, and Medicaid, by driving up deficits.
Scum.
I have been calling among others my worthless POS "representative", who's one of the crackpot teabaggers and beyond redemption. He just voted for this thing. Well, asshole, good luck when your tax scam leads to the next big crash. And, think of all those people suffering and dying for lack of medical care while you are going to church and being a bigshot in your religion.
malthaussen
(17,217 posts)A corporation exists to make money. Period. The only way to regulate their behavior is to regulate their behavior.
Isn't it curious that his twin goals are to increase shareholder equity and decrease the number of shareholders? Funny how that works.
-- Mal
47of74
(18,470 posts)If my local bank got bought out by them I'd be changing accounts tomorrow.
customerserviceguy
(25,183 posts)I hope they're not representative of most business leaders out there.
sofa king
(10,857 posts)Honeycombe8
(37,648 posts)A lot of Americans have 401ks. Most American workers have access to a 401k or something similar. Those that participate will benefit from share buybacks and increased dividends, if that's what these companies do with their tax cut windfalls. And some middle class have small taxable investment accounts, so they'll benefit, too.
You don't have to be rich to have investments. I've had a retirement account for decades (though it was tiny for a long time).
But I'd guess most companies aren't going to use the windfall to plow it back into the business. It's going into their own investment accounts or to give it to shareholders. I don't see how that would grow the economy, though.
Mister K
(450 posts)Large companies with excess capital like to buy things and increase their profit share.