Here’s all you really need to know about the Republicans’ tax “reform” legislation:
When the bill the Senate voted on finally surfaced last Friday–the one with 500 pages that nobody had time to read–the Republican leadership sent copies to K Street lobbyists before Senate Democrats got to see it.
That’s not surprising when you realize the GOP was under the gun from its biggest contributors to get a bill passed or lose financial backing for future elections.
“My donors are basically saying, ‘Get it done or don’t ever call me again’,” explained Rep. Chris Collins (R-NY). If a bill isn’t passed, “financial contributions will stop,” said Senator Lindsey Graham (R-SC).
The Republicans basically delivered the goods. “The most excited group out there are big CEOs, about our tax plan,” gushed Gary Cohn, the White House’s chief economic adviser.
That isn’t how the GOP has been portraying the plan to middle class America, but investors know better. In the succinct words of The Wall Street Journal: “The biggest winners of the Republican tax plan are corporations.”
But that’s supposed to be good for the rest of us, according to President Donald Trump and other Republican leaders, because corporations will take the money they save when their tax rate is cut from 35 to 20 percent and hire more people while increasing wages.
Not quite. When executive at a recent event featuring Cohn were asked who was going to invest the tax windfall in their businesses, few hands went. “Why so few hands?” Cohn asked. As the former No. 2 guy at Goldman Sachs, he knows the answer.
Most of the money is going back to investors in the form of stock buy-backs and increased dividends. As for the workers? A recent survey of top executive by the Business Roundtable found that most CEOs will be hiring fewer workers next year, and that their biggest concern is “wage pressure”–paying their workers more.
But I don’t want to leave the impression CEOs are completely happy with the legislation that has been passed. As the House and Senate begin the process of reconciling their bills, the K Street boys are pushing for elimination of the corporate version of the alternative minimum tax.