Free tip from a successful businessman: Always get paid.
In selling you their trickle-down tax plan, President Trump and congressional Republicans promised you a $4,000 pay raise.
"This change, along with a lower business tax rate, would likely give the typical American household around a $4,000 pay raise," Trump said in October.
“At least $4,000,” House Speaker Paul Ryan emphasized in a post on his official website.
So now that rich people like me have gotten our billions of dollars in tax cuts, you might be wondering where your $4,000 raise is.
Spoiler alert: You’re not getting one.
Take it from someone who has helped run three dozen companies: Businesses don’t give raises because they can. Businesses give raises when they have to. They give raises when they fear losing employees to a competitor, or when the government requires them to through minimum wage laws. But businesses don’t give raises just because they got a tax cut. Businesses pay you what you can negotiate. And few employees in today’s economy have the leverage to negotiate.
So that $4,000 raise Republicans talked about to sell their tax cuts? It was just a trickle-down lie. For decades, trickle-downers have relentlessly promised that if the government cut taxes on corporations and rich people like me, our windfall profits would eventually trickle down to everyday Americans in the form of higher incomes and more jobs. “A rising tide lifts all boats,” they tell you. But the truth is, these trickle-down policies do nothing but make the rich richer.
Over the past 40 years, corporate profits’ share of the economy has doubled, while wages’ share has fallen by about the same amount. That’s almost a trillion dollars a year that used to go to wages for people like you that now goes to corporate profits — and into the pockets of rich people like me. Even before these tax cuts, rich executives could have easily afforded to pay workers more. They just chose not to.
In fact, on the very same day that Walmart made headlines by doling out $1,000 one-time bonuses to a whopping 7% of its workforce, it used its tax savings to offset the expense of closing 63 Sam’s Club stores, costing nearly 11,000 workers their jobs.
Two weeks later, Kimberly-Clark, the maker of iconic brands such as Kleenex, Scott and Huggies, told investors it would use its tax savings to help pay for a restructuring plan that would close or sell 10 manufacturing facilities, eliminating as many as 5,500 jobs.
Meanwhile, shareholders continue to rake in the profits. Walmart plans more than $32 billion in stock buybacks and dividends over the next two years. Kimberly-Clark, which returned $2.3 billion to shareholders in 2017, reassured investors that the “ongoing annual cash-flow benefits from tax reform … provides us flexibility to continue to allocate significant capital to shareholders.”
According to the Academic-Industry Research Network, S&P 500 companies announced $158 billion in stock buybacks in the weeks following the tax cuts, compared with $3.7 billion in one-time bonuses and only $1.5 billion in annual wage increases.
So much for that rising tide.
Here’s the reality: If Trump wanted to give you a raise, he wouldn’t rely on trickle-down lies to do it. A mere $2 increase in the minimum wage would give millions of hardworking Americans a $4,000 raise. A modest updating of our overtime regulations would give a $4,000 raise to tens of millions more.
And of course, if Trump really wanted to put $4,000 in Americans’ pockets, he could have instead given those trillions of dollars in tax cuts directly to people like you, instead of giving them to your boss.
Take it from a successful businessman: Your boss isn’t going to give you a $4,000 raise. And here’s the thing: You can’t fire your boss. But you can fire all those lying politicians who promised you a $4,000 raise. And the best news is, you can do it as soon as November.