Corporate Tax Cuts Don’t Create Jobs, They Enrich CEOs

https://www.thenation.com/article/corporate-tax-cuts-dont-create-jobs-they-enrich-ceos/
"More than half of the firms in the study, 48 in all, cut jobs, affecting 483,000 workers. AT&T shed 79,450 positions, the most in the study, and Verizon cut 78,450, despite having 8.1 percent and 9.1 percent corporate tax rates, respectively. 21st Century Fox, with a low 15.6 percent tax burden, eliminated almost half of its workforce over the 2008–16 period. Incredibly, the main tax credit it took was for “domestic production activities,” which was intended to keep jobs in the United States. General Electric represents perhaps the most devastating example in the study. Its corporate tax rate over the sample was -3.4 percent—thanks to multiple deductions, the government was paying GE money to exist—but it still cut 14,700 jobs. Where did the money go? Into the CEOs’ pockets, for starters. Fox’s Rupert Murdoch’s compensation increased by 74 percent at the same time that he was drastically cutting jobs. CEO compensation at AT&T rose 146 percent. Rex Tillerson, the current secretary of state, enjoyed $27 million as CEO of ExxonMobil in 2016 and a $180 million stock payout for entering government service. By contrast, ExxonMobil, which paid a 13.6 percent US tax rate, got rid of over one-third of its total jobs worldwide. (The company only releases global jobs figures.) Overall, the 92 low-tax firms surveyed raised CEO pay at a faster clip than the US average. The 10 biggest job cutters in the study also spent an average of $45.5 billion in stock buybacks, more than six times the amount of companies in the S&P 500 over this time frame. With buybacks, corporations use profits to repurchase stock, artificially increasing demand and inflating the market price. This benefits not only shareholders with a short-term price boost but also top executives, who typically have large amounts of their compensation tied up in corporate stock. But the trade-off between buybacks and jobs is pretty clear: Profits used to goose the stock price aren’t put to work to invest in facilities or research, or to raise wages or hiring levels."