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Big Companies Cash in on the #GOPTaxScam – Announce More Than $120 Billion in Share Buybacks in 2018

Less than fifty days into 2018, it’s increasingly obvious that the GOP Tax Scam overwhelmingly benefits corporate executives and wealthy shareholders while the middle class gets left behind.
Last week, Senate Democrats released a special report on the real impact of the GOP Tax Scam. As one economics professor said, “The only benefit of share buybacks is to people who are in the business of selling shares: executives.” Since then, corporations have announced tens of billions in additional corporate share buybacks – more than $120 billion in total. 

CNN Money: Only 13% Of Business' Tax Cuts Are Going To Workers, Survey Says. “Businesses are going to spend their big tax cut savings on investors, new equipment, getting out of debt and buying other companies. Oh, and workers. Employees will get a tiny piece, too. A very tiny piece. Only 13% of companies' tax cut savings will go to pay raises, bonuses and employee benefits, according to a survey of Morgan Stanley analysts released Thursday. 43% will go to investors in the form of stock buybacks and dividends, the analysts predict.” [CNN Money, 2/9/18]

Financial Times: Wells Fargo Plans To Close 900 Branches Despite $3.4bn Tax Boost. “Wells Fargo plans to close about 900 branches as part of efforts to cut costs in the wake of its mis-selling scandal even though the bank’s profits received an immediate $3.4bn boost from the US corporate tax cut.” [Financial Times, 1/12/18]

MarketWatch: Wal-Mart Has Announced Thousands Of Layoffs Since Publicizing Bonuses And Benefits Expansion. “Since Wal-Mart Stores Inc. announced it would hand out bonuses and expand benefits to more than 1 million associates thanks to new tax reform measures, the retail giant has also laid out plans for store closures and thousands of layoffs at both the store and corporate level. Wal-Mart confirmed about 1,000 layoffs in California on Monday, including 650 associates in Sam’s Club locations in Los Angeles, Sacramento and Orange County, and 359 at a Wal-Mart location in Sacramento.” [MarketWatch, 2/1/18]
USA Today: Kleenex, Huggies Maker To Cut Up To 5,500 Jobs, Close 10 Plants. “Kimberly-Clark, which also produces Huggies diapers, Kotex feminine hygiene products, Cottonelle toilet paper and Scott paper towels, plans to cut up to 5,500 jobs and close or sell about 10 plants. The Dallas-based company blamed sluggish sales and a bloated production base.” … “Savings from the recent federal tax cut would help fund the cost reductions. It ‘provides us the flexibility’ to do so, Chief Financial Officer Maria Henry said on a conference call.” [USA Today, 1/23/18]
CNBC: As Retailers Herald Tax Savings, They're Still Closing Stores And Laying Off Workers. “Several retailers have touted bonuses, employee raises and improved benefits as evidence that the new tax legislation is creating opportunities for the industry's workers. But even as these proclamations are being made, retailers are still closing stores and laying off staff.” [CNBC, 2/2/18]

Wells Fargo Share Buyback 102x As Large As Pledge to Workers. In January 2018, Wells Fargo announced a new 350 million share buyback - approximately $22 billion based on that day’s closing share price. In December, Wells Fargo announced a commitment to its workers that may have been previously planned, according to statements from a company spokesman. President Trump touted Wells Fargo at the signing of the tax bill, H.R. 1., as evidence that the tax bill was working. According to the investment bank KBW, Wells Fargo’s announcement would cost $215 million, 102 times less than the announced share buyback. [Press Release, 1/23/18; LA Times, 12/21/17; Remarks by President Trump at Signing of H.R. 1, Tax Cuts and Jobs Bill Act, and H.R. 1370, 12/22/17; CNN, 1/3/18]
Anthem Share Buyback 86x As Large As Pledge to Workers: In December 2017, Anthem announced a new $5 billion corporate share buyback. In January 2018, Anthem announced it will increase the dividend it pays its shareholders. In February 2018, Anthem announced it would contribute $58 million for retirement account contributions. The CFO of Anthem told shareholders that approximately 50% of the benefits of tax reform would end up in shareholders’ pockets. [SEC Form 8-K, Date of Report 12/7/17; Press Release, 1/31/18; Press Release, 2/5/18; Q4 2017 Results – Earnings Call via Seeking Alpha, 1/31/18]
Altria Share Buyback 42x As Large as Pledge to Workers. In February 2018, Altria announced a new $1 billion corporate share buyback. The company also announced a $24 million bonus program, 42 times less than the share buyback. [Press Release, 2/1/18; Richmond Times-Dispatch, 2/1/18]