VIDEO: How the Big Brutal Bill Transfers Trillions from Workers to Wall Street
The GOP budget bill recently signed by President Trump is one of the largest transfers of wealth in modern history, according to IPS Global Economy Director Sarah Anderson. In addition to slashing programs like Medicaid and SNAP to fund tax cuts for the wealthy and paydays for Pentagon and ICE contractors, the bill also looks likely to increase the already huge gaps between what CEOs and their workers make.
While millions of Americans are struggling to find work or living paycheck to paycheck, CEOs “can inflate their own paychecks without having to do anything to improve company performance,” Sarah Anderson tells More Perfect Union. That’s in part thanks to stock buybacks, a form of stock price manipulation where companies buy their own stock to artificially inflate its value — and with it, stock-based CEO compensation.
“For much of our history, stock buybacks were illegal,” Sarah explains. “That changed when Ronald Reagan was elected in 1980 on a platform of deregulation.” The changes since then have been stunning. Three decades ago, “the gap between the average big company CEO and their typical worker was about 25:1,” Sarah says. But today we’re often seeing CEOs making thousands of times more.
Those billions that go into buybacks are billions that don’t go into wages, benefits, research, or other improvements. And as Congress has slashed the corporate tax rate, buybacks have taken off.
“The biggest giveaway in that 2017 reform was that slashing of the corporate tax rate from 35 to 21 percent,” Sarah says of the first Trump-GOP tax cuts. “Company leaders promised that they would use their windfalls from that tax cut and funnel it almost immediately into workers’ hands, through wage increase and bonuses.” Instead, they led to a record buyback spree.
It’s time to rein in corporate greed. That means ensuring big corporations pay their fair share, taxing excess executive compensation at a fair rate, and reining in runaway CEO pay and stock buybacks.
Watch the full More Perfect Union video below:
