Why are Democrats so critical of the Republican tax reform? It is rapidly achieving many of the Democrats’ economic goals.
Higher wages
It has been remarkable how many major companies have recently announced they will be handing out raises or bonuses, or both, and in virtually every case they have credited the passage of tax reform.
- Comcast announced it will give $1,000 bonuses to 100,000 employees.
- Fifth Third Bancorp said it will raise its minimum wage to $15.00 an hour and provide $1,000 bonuses to 13,500 employees.
- Wells Fargo said it will boost its minimum wage to $15.00 and give $400 million to charity in 2018.
- Wal-Mart — with more than 1 million U.S. employees, it’s the left’s longtime target for pushing higher wages — will raise its lowest wage from $9.00 to $11.00 an hour and hand out bonuses of between $200 and $1,000.
- And now Starbucks says it will put about $120 million toward pay increases.
Peruse Americans for Tax Reform’s list of companies handing out bonuses and pay increases and you will see there are millions of workers in the lower-middle and middle class who will be making more money in 2018. It didn’t take the left’s marches, protests, or their scolding and shaming — it just took tax reform.
Creating jobs
Barack Obama and Nancy Pelosi constantly asserted that tax increases, massive government spending and wealth redistribution schemes would spur economic growth and create jobs. Didn’t happen.
Tax reform passes and employers immediately begin talking about investing more and hiring new employees. J.P. Morgan, for example, just announced it will be investing $20 billion across its businesses.
Repatriating U.S. dollars
The old tax system encouraged U.S. companies to leave profits earned overseas rather than bringing them back to the U.S. That outraged Obama, who created the term “economic patriotism,” by which he meant U.S. companies had a patriotic duty to bring those dollars back and pay a boatload of additional taxes — so he could redistribute that money to mostly Democratic voters.
Obama was a “stick,” rather than a “carrot,” kind of guy. He denounced U.S.-based international companies and instructed his administration to look for ways to penalize them for their lack of economic patriotism. His effort was a complete failure.
The GOP tax law takes a carrot approach — bring that corporate money back and pay a much lower, one-time tax. BOOM: Apple announces it will repatriate $250 billion and pay $38 billion in taxes.
Apple’s not the only one. Citigroup is paying $22 billion in taxes on repatriated funds, Goldman Sachs is paying $4.4 billion, Bank of American $2.9 billion, American Express $2.6 billion and J.P. Morgan Chase $2.4 billion. That’s money that the federal government never would have received under President Obama — or President Hillary Clinton.
Reenergizing Manufacturing — The U.S. corporate tax rate was so high (35 percent), compared to most other developed countries (about 21 percent on average), and regulations so burdensome that many U.S. companies felt compelled to shift at least some of their manufacturing offshore. In addition, many initiated an “inversion,” which means they merged with a foreign company in a country that had lower corporate tax rates.
Tax reform has largely addressed the tax problems and President Trump’s deregulatory efforts are addressing the other. Thus, Fiat-Chrysler just announced that it will bring Ram truck production back from Mexico to Detroit, a town that lived — and died — embracing Democratic economic policies.
Oh, and the company will be investing $2.5 billion in two plants and creating 2,200 new, much-needed jobs. And one more thing: it will be giving its U.S. employees a one-time $2,000 bonus.
Democrats whined that fat-cat CEOs would keep all that money they would be saving or repatriating under tax reform. Don’t tell that to Verizon, which just revealed it will pay down part of its debt, donate $200 million to $300 million to charity and give nearly all of its 155,000 employees company stock worth about $2,500 per employee.
Can you imagine the Democratic crowing and chest-thumping if these developments had occurred on Obama’s watch. But they didn’t; indeed, they couldn’t — his economic policies prevented it.
So even though Democrats are embarrassed that all their negative predictions about tax reform are proving wrong, they should thank President Trump and the Republicans for helping them achieve their goals.