Letter: Crumbs

Published 12:00 am Wednesday, March 28, 2018

Crumbs

Someone wrote this newspaper saying how much they were getting from Trump’s tax cut, remarking “It wasn’t the crumbs Democrats said.” Some research would have told the writer counting inflation, productivity and his employer’s increased profits, his wages, over a lifetime, should have increased several thousands of dollars more which makes his tax savings look like crumbs or depending on the government for a raise like welfare.

Where did your raises go? Corporations tend to give bonuses called “variable pay.” In 2017 bonuses amounted to 12.7 percent while raises amounted to 2.9 percent of additional compensation. Corporations say they’re paying for performance but pay and performance don’t seem to match because corporations have a record $2.3 trillion in cash. Bonuses never equal the raises you should’ve gotten. As a share of gross domestic product (GDP), total compensation from 1970-2016 fell 4.5 percent from 1970s peak (dollar adjusted). Compensation falls under Republicans and rises under Democrats.

Raises are going to stock buybacks, recently $200 billion, and dividends. Buybacks, declared stock manipulation, was illegal until President Reagan. After buybacks and dividends the remaining corporate tax cut will go mostly to mergers, acquisitions or capital improvements. Reagan’s tax cut was a short-term aid to the economy that was sustained only by nearly quadrupling the national debt — as Trump’s will.

Millions of small businesses, S corporations, in 2013 paid about $1 in taxes for each $1,000 in revenue: previous tax laws weren’t the cause of business failures. Cash flow is a problem for S corporations so tax cuts will do little for raises until next year but, even then, will not cure the decades of wage stagnation. As proof, businesses aren’t giving enough tax cut pay raises, consumer spending is falling.

In 2017 Mohawk Industries made more than $1 billion, reflecting the results of acquisitions. United Automobile Workers workers since 2012 have gotten profit-sharing checks beyond reasonable salaries. Ford’s workers got checks for $7,500 each, GM’s got $11,500 and Fiat Chrysler’s $5,500 but Toyota’s only $3,850. Forbes reported Volkswagen’s line workers in Germany average $67.14 an hour while those in Chattanooga get $33.77 an hour, benefits included. Ford, GM, Fiat Chrysler and Volkswagen in Germany have unions.

Put your crumbs in retirement. Forty-two percent of Americans will retire without savings. The Republicans cut taxes on the rich in 1926, triggering the Great Depression in 1929; the national debt to GDP was 16.19 percent. We don’t have that cushion today.

David Bean

Chatsworth