Trump #taxscam was to create jobs by handing $ 1 trillion in cuts to multinational corporations and a percentage that we promised would put the money into R&D, business development and other job-creating initiatives.
Instead, more than $ 800b of storms fell to stockpiles, where companies literally devoured to enrich their major shareholders.
Texas Instruments is a fantastic case study of how #taxscam works: according to the bill, TI's effective tax rate dropped from 39% to 17%, and the company celebrated by doubling its buyback budget, spending $ 5.1bn. on own shares (more than any other Texas company). It added $ 51 million to its R&D budget, a budget that bells in one third of the repurchase budget.
Although Texas Instruments has enough money to waste billions of repurchases, it still evokes poverty with local authorities demanding (and receiving) hundreds of millions in local government subsidies rather than designing to produce their products there .
Many experts doubted that corporate tax cuts would result in large increases in R&D and capital costs. This is because many companies were already cash-rich. And with low interest rates, they could access cheap debt if they thought an investment was justified, said Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center.
"What have we really seen from the tax cuts? A lot of stock purchases," Rosenthal said. "The market is acting efficiently and rationally by taking these excess profits and sending them to the shareholders. It is a demonstration that businesses do not really need much money."
There are costs of cutting the corporate tax rate so much. Last year, federal tax on corporate income fell by nearly $ 120 billion, down 35%, according to the US Bureau of Economic Analysis. It contributed to a rising deficit, even during a booming economy.
The yearly deficit of $ 442 billion in 2015 approached $ 800 billion last year. It is projected to the top $ 1 trillion by 2022.
Thank you, Uncle Sam! After tax cuts, Texas Instruments spent $ 5 billion in stock – three times more than R & D [Mitchell Schnurman/Dallas News]
( Image: Jacob Jose, CC-BY; Trump's Hair )
( via Late Stage Capitalism )
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