July 11, 2018/Press Release

Earth to Josh Hawley: Data Shows GOP Tax Bill Benefits Big Corporations and Executives, Not Missouri Workers

COLUMBIA, Mo. — As Josh Hawley joins Vice President Pence in Kansas City today to talk about the Republican tax bill, CNN is out with a new report that shows the Republican plan has resulted in an explosion of stock buybacks that “will help enrich corporate executives,” yet “recent research suggests the tax cuts could boost the economy very little.” In fact, Republican Senator Marco Rubio has even admitted that while big corporations have enjoyed savings from the Republican tax bill, “there’s no evidence whatsoever that the money’s been massively poured back into the American worker.”

Meanwhile, big pharmaceutical companies like Pfizer have used $50 billion of the savings they received through the Republican tax bill to enrich their executives and Wall Street investors — all while continuing to raise drug prices and leaving many Missourians struggling to afford their prescriptions.

From CNN Money:

Flooded with cash from the Republican tax cut, US public companies announced a whopping $436.6 billion worth of stock buybacks, according to research firm TrimTabs.

Not only is that most ever, it nearly doubles the previous record of $242.1 billion, which was set during the first three months of the year.

…The buyback boom is terrific news for shareholders — and corporate executives.

…The Republican tax cut created a windfall for Corporate America. The legislation slashed the corporate tax rate to 21% from 35%.

…CEOs are choosing to use a large chunk of that money to reward shareholders.

…However, critics of buybacks argue they disproportionately benefit the rich. That’s because the top 10% of households owned 84% of all stocks in 2016, according to research from NYU professor Edward Wolff.

…TrimTabs notes that the $436.6 billion of buybacks announced during the second quarter would have paid for a $1,000 bonus check to be sent to 6.8 million workers — every single trading day.

A stated goal of the tax law was to encourage businesses to spend more. But it hasn’t helped much, at least not so far.

…The San Francisco Fed said that recent research suggests the tax cuts could boost the economy very little — or perhaps not at all.

A safer bet is that the explosion of buybacks will help enrich corporate executives, whose compensation is often linked to their share price.

Last month, an SEC official detailed a disturbing trend: In the days after companies announce buybacks, execs quietly cash out their own shares. Daily stock sales spiked from an average of $100,000 to more than $500,000 per executive, according to SEC Commissioner Robert Jackson Jr.