CA.) -- Trump
and congressional Republicans are engineering the largest corporate
tax cut in history in order “to restore our competitive edge,” as
American corporations –
especially big ones that would get most of the planned corporate tax
cuts – have no particular allegiance to America. Their only
allegiance is to their shareholders.
their “competitive edge” has little or nothing to do with
helping American workers.
years they’ve been
cutting the jobs and wages of American workers in order to generate
larger profits and higher share prices.
of these jobs have gone
abroad or been outsourced to lower-paid contractors in America.
Others have been automated. Most of the remaining jobs pay no more
than they did four decades ago, adjusted for inflation.
taxpayer bailout: a history lesson
GM went public again in
2010 after being bailed out by American taxpayers, it boasted of
making 43 percent of its cars in places where labor is less than $15
an hour – often outside the United States. And it got its American
unions to agree that new hires would be paid half the wages and
benefits of its old workers.
is global. Big
American corporations are “American” only because they’re
headquartered and legally incorporated in the United States. But they
could (and sometimes do) leave at a moment’s notice. They employ or
contract with workers all over the world.
they’re owned by
shareholders all over the world.
research by the Tax Policy Center’s Steven Rosenthal, about
percent of stock in U.S. corporations is now held by foreign
when taxes of “American”
corporations are cut – as the Trump-Republican tax bill seeks to do
– foreign investors get a windfall.
Institute on Taxation and
Economic Policy estimates that the Senate majority’s tax
bill would give foreign investors a tax cut of $31 billion in 2019.
The House bill would give them $50.4 billion.
money that foreign
investors would otherwise be paying into the U.S. Treasury.
that to tax cuts
the GOP wants for American families
way of comparison, the
combined tax cuts for families in the bottom 80 percent of the income
distribution in the 30 states won by President Donald Trump comes to
just $39.4 billion. That’s far less than the House bill gives
away to foreign investors.
not blaming American
corporations. They’re in business to make profits and maximize
their share prices, not to serve America.
like Trump and the Republicans who are trying to persuade Americans
that tax cuts on American corporations will be good for Americans.
different for many
corporations headquartered in Europe or Canada. Big corporations
headquartered there are far more responsible for the well-being of
the people living in those nations. That’s mainly because labor
unions there are typically stronger there than they are here – able
to exert pressure both at the company level and nationally.
in America get a
lousy deal from corporations compared to workers in other countries
a result, American
corporations distribute a smaller share of their earnings to their
workers than do European or Canadian-based corporations. And
American executives make far more money than their counterparts in
other wealthy countries.
in other rich
nations often devise laws through bargains involving big corporations
and organized labor. This process further binds their corporations to
in America, lawmakers
respond almost exclusively to the demands of big corporations and of
wealthy individuals (typically corporate executives and Wall Street
moguls) with the most lobbying prowess and deepest pockets to
unions are weak
here, and “the preferences of the average American appear to have
only a miniscule, near-zero, statistically non-significant impact
upon public policy,” according to researchers.
is one reason why most
Europeans and Canadians receive essentially free health care,
generous unemployment benefits, paid medical leave, and an
average of five weeks paid vacation.
it shouldn’t be
surprising that even though U.S. economy is doing well by most
measures, and American-based corporations are overflowing with
profits, the benefits are not trickling down to most Americans.
the dominance of
American corporations on American politics, combined with their
singular concern for share prices rather than the well-being of
Americans, it’s folly to think they’ll turn tax cuts into good
tax bills big
corporations are pushing through Congress are designed for one thing:
to boost their share prices, not to boost the vast majority of
B. REICH is the Chancellor’s Professor of Public Policy at the
University of California, Berkeley, and a senior fellow at the Blum
Center for Developing Economies.
served as secretary of labor in the Clinton administration and Time
magazine named him one of the 10 most effective cabinet secretaries
of the 20th century.
Reich has written 14 books, including the best-sellers Aftershock,
The Work of Nations, Beyond Outrage
and most recently Saving
is also a founding editor of The
American Prospect magazine,
chairman of Common Cause, a member of the American Academy of Arts
and Sciences and co-creator of the award-winning documentary
INEQUALITY FOR ALL.