BOMBSHELL: GOP/Trump TAX SCAM job growth cost taxpayers $4 million per job – 83 times the average American wage.
pennlive.com
Posted Jul 13, 8:36 AM
By Chris Macke
In the selling of the Tax Cut and Jobs Act (TCJA) leading up to its passage, Americans were promised skyrocketing job growth. In a November 4, 2017 Tweet then Speaker Paul Ryan wrote, “Tax Cuts & Jobs Act will create nearly 1 million new jobs.”
Unfortunately for the American people that has turned out to be just another broken promise made by a politician.
In the 18 months following passage of the TCJA job creation was only 470,000 greater than the number of jobs created during the 18 months prior to passage of the TCJA, less than half of the million additional jobs promised. At $1.9 trillion in additional debt, each of the 470,000 additional jobs came at a cost of more than $4,000,000 per job. How bad of a return on investment is that for the American taxpayer?
According to the Social Security Administration, the average American wage was $48,251 in 2017. Instead of borrowing $1.9 trillion in additional debt to pay for the TCJA tax cuts, Congress could have instead used the borrowed money to hire more than 4,000,000 Americans paying them the average wage of $48,231, far more than the minimum wage.
Congress could have hired eight times more Americans than the number of jobs generated by the TCJA. That would have been a much better return on investment for the $1.9 trillion of additional debt that was levied on the American taxpayer.
In addition to the poor return on investment, the increase in job growth was short-lived. After job growth increased to an average of 223,000 per month in 2018, average job growth in the first six months of 2019 declined to 172,000, less than the 179,000 monthly average created in the year prior to passage of the TCJA. The increase in jobs was not only half of what was promised but temporary. The promise of ongoing increases in job creation turned out to be more akin to a campaign promise than a policy reality.
Why did the TCJA fall so short of its promises? Simple – there were no real incentives for companies to increase hiring. Companies were not required to increase hiring to receive the significant decrease in the corporate tax rate from 35% to 21%. In fact, companies could fire employees and still receive the significant reduction in tax rate, and they did. The 12 companies below alone fired or announced the firing of nearly 150,000 Americans.
In what may be the most ironic tax-cut-related round of layoffs, and likely surprising twist to the architects of the TCJA, Kimberly-Clark not only said it was going to eliminate up to 5,500 jobs but that the tax savings from the TCJA would be used to fund the layoffs. While AT&T announced at least 4,000 job cuts, in the granddaddy of them all, Verizon is laying off 44,000 workers and transferring 2,500 call center jobs to India. Walmart announced layoffs of nearly 10,000 employees shortly after passage of the TCJA.
Remember the Indiana-based heating and air conditioning maker Carrier Corporation that received more than $7 million in tax breaks from the state of Indiana? It didn’t take Carrier long to lay off more than 200 workers after the TCJA was passed. Not to be outdone, the American icon Harley-Davidson announced it would be closing its Kansas City, Missouri, plant, laying off approximately 800 workers. Macy’s announced it would be laying off 5,000 workers while Tenet Healthcare announced it would lay off 2,000 workers.
As part of a restructuring plan Hewlett-Packard announced up to 5,000 job cuts, while in the financial industry, despite reaping significant tax-cut-related profits, Wells Fargo announced it would lay off 26,500 employees and Citibank announced that it could eliminate half of its 20,000 technology and operations staff, driven primarily by automation. Finally, despite both a massive bailout that cost Americans $11.2 billion and significant tax cuts, General Motors announced 14,000 layoffs.
At a cost of more than $4,000,000 per job, the TCJA may go down as the most inefficient and costly taxpayers funded jobs program ever. It is time Congress and Americans finally face the reality that cutting the corporate tax rate with no requirements for companies to increase hiring is a policy based at best on naivete and at its worst driven by campaign donations. |
