They (the GOP) told us that the tax cuts were going to result in more money for workers.
They lied. I’m shocked! Shocked, I tell you!
Guess where the money went? A lot of stock buybacks and dividend hikes – meaning more money for the corporate owners. Before it was signed into law, various think tanks predicted that 12-13% of the ‘windfall’ would go to workers, so it wasn’t exactly a surprise that corporations would benefit. Compared to what happened, that would have been good. The reality? 3.3% of the tax cut windfall went to employees by one scorecard – $6B out of $177B.
Corporations never went to kindergarten so they don’t know how to share. So what can we do?
Gradually raise the minimum wage to $15. Companies that pay their people well have lower turnover, higher job satisfaction and lower expenses. In addition, putting more money in the hands of poorer people spurs economic expansion because they SPEND the money – they don’t stash it away in the Cayman Islands. The argument that a higher minimum wage results in more unemployment has been disproven these days in Seattle, and that’s nothing new as history has shown. Trumpanzees like Jordan Rachel say that a $15 minimum wage will make Taco Bell burritos $38. Well, New York City already has a $15 minimum wage and the burritos there are $1.89-$4.49.
Besides – if your company requires its workers to live below the poverty line and be eligible for federal and state welfare programs to feed them so that the owner can make a profit – that business shouldn’t exist.
But what about others? How about limiting the deductibility of executive compensation to a certain multiplier of the company’s average worker’s salary? Since 1965, the ratio of executive salary to worker’s salary has gone from 18 times a worker’s pay to 220 times a worker’s pay. By 2018, it was over 260x. The latest 2020 numbers show this has gotten to an obscene 351x! In Japan, while one meme says it’s 11x, it’s actually 67x. The US numbers are patently ridiculous. Let’s say, for round number’s sake, that we set a policy of 100x worker’s pay for executive pay. If a company wants to pay the executives more, they would have two choices. Either hike worker wages to raise the threshhold, or lose the deductibility of the excess compensation and pay the taxes on that money (in addition to the income taxes that the executive will pay).
“Trickle Down Economic Theory” doesn’t work. Thinking that a corporation will rain its largesse down to the people is thinking of the most naive kind. A corporation has no soul. You generate economic growth by people wanting to buy more goods and services. With more money, people buy more things – as opposed to stashing their money overseas.
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